Where the money went
...as in the directive, “follow the money”
Today’s New York Times reports that hospitals are finding that more of their patients can’t pay. Let us note at the same time that the Felon President’s signature legislation, the so-called One Big Beautiful Bill Act (OBBBA) of 2025, set in stone the 2017 tax cuts of his first term’s signature legislation. A recent paper in the Journal of Economic Perspectives notes that “the tax cuts the Republicans made permanent in 2017 vastly disproportionately benefited the highest-income households relative to others.”
These tax cuts have a sibling relationship with the flat tax, except it’s closer to being a flat tax cut. Everyone gets to keep a larger proportion of their income, but the proportion is quite similar between the highest earners and everyone else. Table 3 in the same paper, Distributional Effects of the Tax Cuts and Jobs Act, breaks it down by dividing the taxed into five groups. The lowest 20% of earners will see their income increase by around $60; the highest 20%, by around $7,640. But these differences become extreme moving into the top 1% of earners ($51,140) and top 0.1% ($193,380).
Federal tax cuts increase US annual federal budget deficits… Federal budget deficits add to US national debit, the accumulation of each year’s budget deficits. Per the Treasury Department in 2019, “The U.S. government’s budget deficit ballooned to nearly $1 trillion in 2019.” One current estimate has the US with “record high debt in 2028 that rises to 124 percent of GDP [Gross Domestic Product] by 2034.”
My view is that it’s OK to increase federal budget deficits when the country is faced with great national emergencies, like the Covid pandemic or the Second World War, or when borrowing money to finance the deficit is cheap and ordinary people are desperately short of funds. As the economist Paul Krugman put it a year and a half ago:
Most of the run-up in debt over the past 25 years actually took place for good reasons, and it’s hard to tell a story in which we ended up with substantially less debt without paying a heavy price in high unemployment. But we are now at a point where continuing to run up debt no longer makes sense Even people like me, who are usually relaxed about debt, would really like to see a serious effort to slow the rate at which debt is rising. And under current conditions we could rein in the growth in debt without doing major economic damage.
The FP thinks that one great way to tip the scales towards greater federal fiscal responsibility is by slowing down Affordable Care Act (ACA) subsidies, in the form of tax credits, that came in with the Covid pandemic. So people show up at hospitals without insurance, or can’t pay their bills afterwards. The Times article quotes a Catholic hospital group CEO, Laura Kaiser, who is expected to chair the American Hospital Association in 2028: “We’re really crushing people who are desperately trying to pay their bills.”
Without organizing, those desperate folks are likely to think that their hardships are their own fault. But those of us who can make the connection between extreme wealth and individual financial desperation have the ability to make those connections visible. It’s something that we can do, to push against the onrush to an ever more dystopian society, and persuade others to join the effort. “Don’t mourn, organize!”