Viewpoint: With economy humming, Trump gooses up fear to boost Republican candidates

Karen Rubin

The pundits keep saying that the strong economy will keep Republicans from being wiped out in a Blue wave in the midterms 2018. I don’t know why that would be true when you consider that 2014 was also a strong economy, especially compared to 2008 when Obama came into office as 850,000 people a month were losing their jobs, health insurance, retirement, homes were being foreclosed.

By 2014, jobs had been increasing steadily for four years, incomes were up, people were buying homes. In comparison, the economy was booming, the budget deficit was coming down at record speed.

The current economic growth is basically a continuation of the expansion that began in March 2009, because of all that Obama did to pluck the nation out of the throes of a Great Depression.

What is significant is that Trump has pulled out every tool and lever to artificially juice growth (4 percent GDP!) as if the economy were in decline instead of at the end of a record-breaking growth cycle, so that when the cycle inevitably reverses, there are no tools or levers to pull.

Tax cuts?

Cutting the corporate rate from a nominal 35 percent (since no one paid that) to 21 percent (without eliminating the loopholes, and in fact continuing to incentivize foreign investment) was a one-shot that instead of triggering new investment and wage increases, only went to a record $800 billion in stock buybacks (that gooses stock prices which Trump boasts about), and another $400 billion in shareholder dividends.

Some 80 percent went to the top 1 percent, with the vast majority of Americans, if they got the one-time “bonus” or even a piddling raise, not getting enough to cover the increase in costs for gas, health care, clothes, appliances, cars, homes (and on and on).

Now, because the so-called Tax Reform is being recognized for what it is, a Republican Tax Scam to shift $1.5 trillion into the already swelling pockets of the obscenely rich and corporations, swelling the budget deficit, sending the national debt soaring and prompting the Republicans to promise to do what they have been salivating to do for decades, cut Social Security and Medicare, Trump is now claiming (lying) to be seeking a 10% tax cut specifically for middle class.

Trump is capitalizing on the strong economy (he didn’t build that) to extort concessions on trading partners, allies and adversaries, alike.

But ultimately, his trade wars will hurt Americans, both economically, and in the broken alliances that have made the US an untrustworthy partner.

His trade wars and tariffs, and the economic cost and uncertainty they present, mean fewer jobs, less purchasing power, driving down consumer demand which accounts for two-thirds of GDP.

How else is Trump drying up consumer spending which has been the driving force of the economy? Taking away Medicaid, food stamps (ever SNAP $1 spent generates $1.73 to GDP), the Children’s Health Insurance Program (CHIP), driving up the cost of health care, ending programs aimed at reducing student debt, taking away consumer protections against predatory lending and abuses by for-profit colleges, sabotaging development of clean, renewable energy which in turn props up prices for fossil fuels. Even gas prices are rising again, thanks to Trump policies.

And if tax cuts were supposed to put more money in families’ pockets so they could spend more, the Republican tax scheme which eliminated the deductibility of state and local taxes represents tax increases for those (predominantly Blue) states.

The proverbial sh-t won’t hit the fan in time for the midterms but probably by the 2020 presidential campaign but there will not be any levers the government can pull to keep the United States out of another Great Recession, as Obama did.

There won’t be money for stimulus, paying for infrastructure or keeping teachers and police employed; interest rates are already pretty much as low as they can go (Trump is attacking the Fed chair for daring to raise interest rates to stem inflation); and economies around the globe, also straining, will not be inclined to help the United States.

Certainly, China won’t be buying up U.S. treasuries.

Trump could care less, though. He anticipates leaving the White House the multi-billion dollar man, with lots of deals in the works. But millions of Americans will find their retirement, their college fund, their hope for owning a home dashed. Again.

Trump should have used the economic boom to pay down the deficit, forge public-private partnerships to rebuild infrastructure for the 21st century, invest in precision medicine and a health care system that actually works, instead of chalking up an $800 billion deficit this year, rising to $2 trillion in the next few years, and sending the national debt soaring – something that Republicans only obsess about when a Democrat is in the White House.

He doesn’t care because if the Democrats retake the House in the midterms, he will have Democrats to blame.

Trump knows people vote their outrage. To the extent people feel more secure economically, they become complacent.

Only 12 percent of Americans say the economy is their biggest issue.

Most say health care – and the prospect of losing coverage for pre-existing conditions – is their greatest concern, which is why Trump and the Republicans have been lying about caring to preserve this part of Obamacare, and goosing up fears about aliens invading the border.

Indeed, turnout will turn on which side is angrier: Republicans have already gotten what they wanted: a partisan hack on the Supreme Court for decades to come who will continue to strip away voting rights, workers rights, environmental protection and protect Trump from prosecution.

Democrats should be incensed at how Republican control of Congress has basically disenfranchised two thirds of America and that with Republicans in power is states, voter suppression has revived the tactics of Jim Crow.

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