Donald Trump's Budget Will Cut Trillions From Social Safety Net To Give Tax Breaks To Morbidly Rich

This is fascinating because the Trumpistas, the Republicans, just released a budget which is going to cut Medicare, Medicaid, Social Security, food stamps. It's going to cut everything. It's just right across the board, it's three trillion dollars in cuts over a ten-year period. Three hundred billion dollars a year. And what that means is that during bad times things are so much worse.

One of the basic rules of economics and politics that the Republicans have broken this year is that when the economy is on a tear, when the stock market's up, when wages are up, when unemployment is down, when the economy is doing well, that's when you raise taxes, raise revenues, and to the extent that you can, reduce spending.

Typically you can when the economy is doing well because you're not spending as much on unemployment benefits, you're not spending as much on food stamps, you're not spending as much on aid to people, because they have jobs.

When you've got full employment in your economy, your government expenditures go down. So during a time like this last couple of years have been, that is when the government should be raising taxes and squirreling away money, storing money for the winter that's going to come, which inevitably comes - bull markets never last more than seven to nine years and we're nine years into one right now, arguably eight years - so this bull market when it ends means that you're going to see a rise in unemployment, you're going to see a lowering of the employment rate, you're going to see more and more people out of work, you're going to see more people asking for workers compensation or for benefits, you're going to see more people signing up for food stamps and for Medicaid at the exact same time that the Republicans are cutting three trillion dollars out of those programs.

And you now have some twenty states that are in the process of attempting to make unemployment insurance, which was put into place in the 1930s by Franklin Roosevelt, a welfare program that you have to be drug tested to be eligible for. Plus every week you have to prove that you have tried to get a certain number of places to hire you, even if you live in a place like Appalachia or some inner cities where there literally are no jobs - there's nobody hiring. You still have to pee in the cup, you still have to fill out the forms, you still have to jump through the hoops to get your average of $330 to $350 per week which is the average unemployment benefit.

Now, unemployment insurance is the most robust of all the programs, that catches people when they fall out of employment as a result of an implosion of the economy. So this is the main thing that people who are not retired yet - people who are under 65 - rely on to catch them when they fall. And instead of protecting people, according to this article by Arthur Delaney:

"Nine states reduced benefit duration from the usual 26 weeks, and many others have apparently gotten more aggressive in checking up on claimants to make sure they're continuing to look for work, which has always been an eligibility requirement."

That's just in the last year. Nine Republican-controlled states.

"As a result, the rate at which unemployed Americans receive layoff compensation overall has fallen from about 36 percent in 2007 to about 28 percent in 2017, according to data from The Department of Labor."

So almost ten percent fewer people are even eligible now because they're "tightening up" the rules. The main thing that they're doing is they're finding ways to kick unemployed people off the benefits after they've already been determined to be eligible. And the main thing that they do with that is, "oh, you didn't pee in the cup this week," or "oh, you didn't fill out the form saying that here's the three places or six places or whatever it is that you went to look for work." Arthur Delaney writes...

"At the beginning of last year, only 21 state trust funds had achieved what the Labor Department considers a minimum level of solvency."

Remember, I said during good times you stash the money away because the bad times will come? 21 states haven't even done that.

"If they can't catch up before layoffs hit, there will be political pressure to follow the new path that other states have taken to reduce benefits."

"But Congress and the president might be more interested in urine tests than UI. Since about 2011, Republicans at the state and federal level have been trying to make drug tests a requirement for welfare, food stamps and unemployment insurance."

"Wisconsin, Texas and Mississippi have already passed drug test laws and are just waiting for a green light from the Labor Department. "

In Florida in order to file for unemployment, you have to take a math and reading test, plus you have to file online which many people who are broke or unemployed don't have the resources to do. And as a result of that, unemployed people claiming unemployment benefits in Florida have dropped from 32 percent successful claims to 9 percent. Good luck!

And it just goes on and on. Alternative work arrangements - so many more people now are employed in the gig economy, whether it's Uber drivers or TaskRabbit or something, those people don't even qualify for unemployment benefits.

Comments

Edward Dodson's picture
Edward Dodson 26 weeks 3 days ago
#1

Thom, I certainly concur with you regarding the decisions being made by the Trump administration and the self-described “conservatives” who have the votes to dismantle the nation’s safety net of social welfare programs. These programs have been necessary because our systems of law and taxation have their origins in an ideology that secured and protected privilege rather than equality of opportunity.

The source of inequality in the United States is not a recent occurrence. It goes back to the founding era and the design of the U.S. Constitution. The North American colonies ruled by Britain were colonies granted to a landed elite of families and aristocrats. Independence from Britain did not lead to the elimination of landed privilege in the new United States. Those leading citizens who met in Philadelphia to forge a new system of government had no desire to change the fundamental systems of law and taxation that had enabled them to inherit large landed estates subject to minimal taxation. To fund government they imposed taxes on commerce and tariffs on imported goods.

Fast forward to the early 20th century and the “progressive” effort to begin to tax incomes of the wealthy. That was at the core of the individual income tax as initially designed. Only those with relatively high incomes was subjected to taxation, on the sound observation that much of this income is unearned, derived as “rents” associated with the ownership of land and land-like assets (e.g., licenses to monopolize frequencies on the broadcast spectrum, and licenses to exploit natural resources that have an inelastic supply provided by nature).

It was the American political economist Henry George, who, in the last two decades of the 19th century, made the case for bringing an end to landed privilege by changing the way revenue is raised to pay for public goods and services. George’s analysis proved that it was possible to create a full employment society, one in which there would always be more jobs looking for workers than workers looking for jobs. Eliminate all taxation, he argued, replacing taxation with societal collection of the potential annual rental value of all locations, all natural resource-laden lands, and all other natural assets with an inelastic supply.

Henry George’s perspectives are receiving renewed attention, not in the United States (except by some cities as restructuring of local property taxation) but in the United Kingdom. After years of studies by economists, by public policy think tanks by the Labour and Green parties, it seems possible that enabling legislation might be brought forward to a vote in the House of Commons. The latest political figure to endorse the measure is former prime minister Tony Blair. He and other leaders in Britain might be recalling that none other than Winston Churchill campaigned for the taxation of Britain’s land as a young man. In a 1909 speech he declared that while the monopoly of land was not the only monopoly or the only source of unearned wealth, but the monopoly of land was “the mother of all monopolies.”

We in the United States desperately need to a high level of public discussion the analysis of our economic system’s shortcomings offered by Henry George over a century ago.

DrRichard 26 weeks 3 days ago
#2

Ah, well the moral and ethical implications of treating people so abusively aside, you have to follow the money. Not the pittance given to the unemployed, but who is profiting off of the "war on drugs." Like the other "wars on nouns" there is plenty to be made here. So trace what companies (not just their front corporations) control drug testing, then see how much they are giving legislators in "contributions".

It always works like this; body scanners suddenly came in after Obama spent some time with the president of the company that made them--and got them a stimulus money contract too. Powerless, ill-informed or fearful people are typical prey for those using the system.

And, I might add, the budget that cuts Medicare, Medicaid, education, etc. also inflates the War Department. Why not? That is more profitable for those who work with Congress to get contracts and give some of the money back. The fact that ultimately there will be no America left to defend seems to have escaped them entirely.

Hephaestus's picture
Hephaestus 26 weeks 3 days ago
#3

Shame!

Dystopia

In the worlds biggest economy

Riverplunge's picture
Riverplunge 26 weeks 3 days ago
#4

The GOP coudn't care if it littleraly split the world in half. Just as long as the GOP gets money from the Ultra-Rich, and the Ultra-Rich and their Corporations gets tax breaks... Public service done in private rooms away from the eyes of the voters.

Legend 26 weeks 2 days ago
#5

I have had a lot of drug tests for a job. Interesting that I have never been tested on international jobs, only in America. My opinion is test all, or none.

2950-10K's picture
2950-10K 26 weeks 2 days ago
#6

Regarding Kochpublican, Ryan, Trump, budget proposals.....they're always loaded with useful facts for attack ads during election season...just saying.

2950-10K's picture
2950-10K 26 weeks 2 days ago
#7

I got drug tested at my job for many years too Legend....I called it my random, but always seemingly annual drug test! ...and thought it a ridiculous waste of taxpayer funds.

Willy Lohman's picture
Willy Lohman 26 weeks 2 days ago
#8

Hi Thom,

Divisive partisan politics has been a fact in American politics since the beginning of the republic; dirty tricks, filibusters, power plays and midnight votes have been the tools of elected politicians that have shaped and steered US economic policies for the past 200 years.

During the 60's-70's, “Think Tanks” started pushing “Individual Rights vs the rights of society in the first attacks on the social safety net of civil society, followed by the “Welfare Queen” contrivance, deregulation of industry, and the schema of the corporate and economic elite to shift the US tax burden from themselves onto the backs of citizens. I noticed an ideological change and tact in the republican party at about the time Reaganomics was surreptitiously foisted upon the American people through disingenuous populist rhetoric. During and since the 80's, the republicans scorned the collegial tenor of congress and instead approached “The People's Business” with a derisive and unyielding adherence to an insidious ideology held and supported by corporate powerhouses, their owners and ececutives, that pre-dated WWII.

Corporate America, during the 30's, abetted by their control of and the manipulation of news openly supported and financed the dissemanation of “fascist propaganda” until the US got involved in the war. Even this did not stop corporations from “Doing Business” with the enemy while the war raged; their economic and political clout burried their treasonous behavior as they re-branded themselves as patriots once the war ended. Just because the Allies succeeded in defeating Europe's fascist dictators doesn't mean the ideology died with them. We know, now: that thousands of Nazi with skills were secreted into the United States through the collusion of the banks on Wall St.; more than 2500 US corporations (placed their corporate bund agreements with Nazi corporations above US patriotism- treason) , powerful politicians and “citizen Bunds” (German-American Volksbunds” pro-Nazi sympathizers in the U.S. during the 1930s and 1940s). Following the war and the distaste for “Fascist Nazism”, corporations have essentially continued to operate with a “Fascist” ideology using the phrase of, “Maximize Profit and Minimize Costs” that they euphemistically call: “Free Enterprise”.

Since the 1980's, the republican party traded “Civil Political Disagreement” for an ideological covenant that: “the common man is and must be limited to “knowledge” of a different sort: to myth, revelation, custom, and prejudice. Neoconservatives believe the opinions of the nation must therefore be shaped by those who rule. To control ideas is to control public opinion, which in turn is to control the regime as a whole, which is exactly what Goebbels perfected for Hitler.

Neoconservatives champion the rule of a philosophically cunning elite over a population that will never be able to understand the insidious duplicity of their intellectual masters. Instead, the populace is steered toward self-sacrifice, war, and nationalism — as well as a set of religious and moral beliefs that the elites in no way share. Such a doctrine points disturbingly toward fascism.

Not surprizing considering the economic philosophy, promulgated by NeoCons and the republican party, was born during the European FASCIST movement of the1930's. Both Strauss and Hayek developed their economic opinions while Mussolini, Franco and Hitler practiced authoritarian fascism where the “public interest” is whatever (supposed) wise and benevolent men say it is, which means that some men are more fit to rule than others; and the chosen statesmen should not be hampered by conventional morality or the rule of law.

This disdain for democracy, the law and the “Rights of Citizens” is clearly visible in the actions of trump, the repubtilian congress, ignorant anger by todays bigoted “brown shirt” quislings.

The lineage of hatred, greed, religious intolerance, racism, and authoritarian rule superceding the Rights of Man and democratic principles happening today can be directly traced to: Jim Crow, eugenics, right wing christianity, nazi fascism, corporate treason and hardliners of the republican party.

Welcome to the unfolding of the “Fourth Reich”!!!

Legend 26 weeks 2 days ago
#9

Budget chart:

http://tmsnrt.rs/2stAquQ

jefflisse's picture
jefflisse 26 weeks 2 days ago
#10

Yep. Hes been trying for three years. This is the year that the "Koch whore" Scott Walker pushes it through in Wisconsin...

https://www.theatlantic.com/politics/archive/2017/12/wisconsin-drug-test...

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