The consequences of three decades of anti-government Reaganism and free-market extremism are now coming clearly into view, a cruel and brutish America split sharply between a few lucky haves and many desperate have-nots.
As Rep. Paul Ryan proudly declared in unveiling the Republican budget plan for fiscal 2012, “This is not a budget; this is a cause.”
It is the “cause” advanced in the modern era by President Ronald Reagan and economist Milton Friedman. It calls for further slashing the tax rate for the richest Americans by another ten percentage points, from 35 percent to 25 percent, while enacting a wide range of domestic spending cuts, including phasing out the Medicare health program for the elderly as it has existed since the 1960s.
Under Ryan’s plan, senior citizens in the future would have to select a private health insurance policy with the government paying “premium support” worth about $8,000 to the company, thus shifting a heavier, even crushing, financial burden onto the elderly.
And, since Ryan’s plan also would repeal President Barack Obama’s health reform, which prohibits insurance companies from excluding coverage of “preexisting conditions,” senior citizens suffering from chronic illnesses might find themselves unable to get coverage of those ailments and likely consigned to a premature death.
As medical writer Sheila Guilloton noted about Ryan’s plan, “What is not clear or even addressed is the problem of putting eligibility to purchase health insurance back in the hands of the health insurance industry.”
Even today, people just shy of Medicare’s 65-year-old threshold find themselves either shunned by insurance companies or paying exorbitant amounts. Yet Ryan envisions thrusting Americans over 65 into that same predicament, only worse because they are more likely to have health problems and are less likely to be under a company plan.
“For older people the prospect of getting and paying for private health insurance is daunting,” Guilloton wrote “For instance, in Connecticut a PPO with a $5,000 deductible would cost a 60-64 year old and spouse between $1,400 and $1,900 a month. And that cost presumes that they either are part of a company group plan or have no pre-existing conditions.
“The plan to return control of access to health insurance companies without addressing the issue of eligibility and cost control is simply to return to the very pattern of abuse in place before the attempt at health care reform.”
The elimination of Obama’s health-care reform also would remove requirements that insurance companies devote a high percentage of their premiums to medical services rather than diverting the money to higher executive salaries and greater profits.
In other words, Ryan’s plan would fatten the insurance industry's bottom line by squeezing the elderly on health care. In effect, the plan would create a free-market “death panel” by forcing many senior citizens to skip necessary care.
Ryan also would “save” large sums by turning the Medicaid program for the poor into a state block grant system, which would leave states little choice but to also turn their backs on many sick and disabled.
No Balanced Budget
Yet, even as Ryan touts his goal of cutting government spending by more than $6.2 trillion over the next decade, compared to Obama’s budget, Ryan’s plan would still not result in a balanced federal budget for nearly three decades, let alone pay off the accumulated national debt.
That’s because Ryan would accompany his steep spending cuts with lower tax rates for the wealthiest Americans. And those lower tax rates – based on an ideological devotion to Reagan’s “trickle-down economics” and Friedman’s “free-market” extremism – have been a principal cause of the debt problem.
Remember just a decade ago, after President Bill Clinton and the congressional Democrats raised the tax rates modestly, the U.S. government was running a surplus and was on a path to eliminate the entire federal debt.
Then, President George W. Bush and congressional Republicans began enacting tax cuts again.
Those tax cuts – combined with Bush’s two wars and the financial crisis caused, in large part, by inadequate federal regulation of Wall Street – flooded the U.S. government ledgers with trillions of dollars in red ink.
So, the logical remedy would seem to be to combine some reasonable spending cuts with a surtax on millionaires and billionaires. There also could be huge savings if the United States shifted to a “Medicare-for-all” health system that eliminated the expensive private insurance middlemen.
But that would go against Reagan/Friedman dogma about giving virtually all power to corporations and trusting in the “magic of the market.” Therefore, Ryan’s “solution” is to savage domestic government spending, weaken government regulatory powers and pass more tax cuts for the wealthy.
Since he unveiled his budget plan this week, Ryan has been widely hailed by the mainstream U.S. news media as a “courageous” visionary, a thoughtful guy who is brave enough to make the tough choices.
In watching the correspondents on CNN and CNBC – not to mention Fox – it’s almost as if the revenue side of the budget crisis is non-existent. “Political courage” only comes from destroying the remnants of Franklin Roosevelt’s New Deal and Lyndon Johnson’s Great Society, if not Theodore Roosevelt’s progressive era.
Why not repeal the entire 20th Century and take the nation back to an era of two Americas, a few living in the lap of luxury and most living hand-to-mouth?
Most media talking heads appear to be either devotees of free-market economist Milton Friedman or careerists who know that no one ever lost a promotion by promoting the anti-government doctrine of Ronald Reagan. (Reagan, of course, got his big start in politics in the 1960s by decrying Medicare as socialist oppression.)
The Cost of Reaganism
The American people are now paying the price for the lack of nearly any critical coverage of the Reagan presidency, as was apparent last February in the hagiography broadcast and written about the 40th president around the centennial of his birth.
The syrupy handling of Reagan and his legacy has had a powerful impact on the judgment of the American people. According to a recent Gallup poll, Americans rated Reagan the greatest president ever, five percentage points ahead of Abraham Lincoln, who came in second.
When the Reagan mythology is combined with the powerful influence of the right-wing media, it shouldn’t be a great surprise that many average Americans don’t blame Reagan and his anti-government policies for why their incomes have stagnated or sunk over the past three decades.
Instead, many Americans, especially white men, have been encouraged to blame “guv-mint” and its supposed favoritism toward minorities and the poor. So, some don “revolutionary war” costumes and join Tea Party groups, which are often quietly funded by politically savvy billionaires.
Unlike the duped average guys, the billionaires – the likes of the oil magnate Koch brothers and media mogul Rupert Murdoch – are keenly attuned to their class interests. They know the only serious check on their extraordinary powers would be a democratized and energized federal government.
So, they invest in the faux populism of the Tea Party and Fox News to rile up the white guys with anti-government rage.
Meanwhile, on the opposite side, American progressives have tended to be ineffective in presenting a consistent or coherent message to the people.
Though many progressives recognize the practical value of reforms like Medicare in making the lives of average Americans longer and more fulfilling, some on the Left preach an unrealistic perfectionism that finds little value in imperfect reforms. They almost invite the worst social pain as the only route to some “revolution.”
The combination of these factors – a well-organized Right against a largely disorganized Left – has brought a bleak future into sharp focus.
It can be seen through the lens of Paul Ryan’s budgetary "cause." It would leave sick elderly to die and the nation’s domestic infrastructure to decay, while insurance companies would reap more profits and the super rich would be taxed even less.
It’s an outcome that would have put a crooked smile on the lips of Ronald Reagan and Milton Friedman.