The Washington Post reports, “Several senior White House officials have begun discussing whether to push for a temporary payroll tax cut as a way to arrest an economic slowdown, three people familiar with the discussions said.”
The discussions follow a budget deal that sent spending upward by $320 billion and ensured trillion-dollar deficits for the foreseeable future, vehement calls by the president for the Federal Reserve to cut interest rates further, and even a push to embark on a new program of quantitative easing.
Like a doctor injecting a sick, lethargic patient with uppers, the policies aimed to jump-start the economy may temporarily infuse life into the convalescent. They do not do anything to cure the underlying condition.
The national debt fast approaches $23 trillion. This burden, substantive and psychological, weighs down the economy. The structural fiscal problems, involving both taxes and spending, and pressure on monetary policy to keep rates artificially low, not only ensure an eventual downturn but limit short-term palliatives as well.
Out-of-control federal spending comes directly as a result of out-of-control health-care spending. The federal government spent about one in 20 dollars on health care a half century ago. Today, the federal government spends almost one in three dollars directly on health care. This response to medical inflation also fuels it. A half century ago, health care amounted to about 7 percent of the American economy. Today, it accounts for about 18 percent. The more the government commits itself to subsidize the medical bills of individuals, the more it necessarily spends. And this inevitably grows worse. By the middle of the next decade, the Centers for Medicare and Medicaid Services estimates, health-care spending grows from 18 percent of GDP to over 20 percent ($5.6 trillion). Taxpayers, because of Medicare Part D, Obamacare, and much else, pay a large portion of this amount.
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04.26.2024