Peter Morici: Voters are responsible for the mess in Washington
Donald Trump’s tweets, Ukrainian gambit and Middle East blunders — as well as a suburban middle class that believes it is poorer these days when it is indeed richer — may well give us a new president next year.
However, the problems most plaguing voters — skyrocketing medical costs, tuition and student debt and failing roads and bridges — will continue to fester.
The Obama presidency mostly failed to alleviate or exacerbated those through blind faith in government or simple inaction. The Trump administration and Republican Party — when it controlled Congress — delivered too little. All were constrained by voters unwilling to accept the remedies necessary to fix those problems.
The average employer-paid family health plan now exceeds $20,000, and millions are foregoing coverage they can’t afford or simply risk doing without. Those costs make adding good paying jobs terribly expensive for businesses, worsen inequality, and slow the progress of minorities and women.
Our European and Canadian brethren have embraced variants of the U.K. single-payer system or the German model where prices that private insurers pay for drugs and other services are heavily guided by government agencies.
Most Americans who have private health insurance don’t want to give it up — that makes a single-payer system a tough political climb. Strong GOP resistance to price controls with teeth likely reflects sentiments among a large enough block of voters to stop those from becoming law in the Senate.
Upgrading infrastructure and flood protection to mitigate climate change will require huge sums However, raising the gas tax — frozen since 1993 — has become the new third rail of politics, and toll roads have not worked out in many places. Charging the true cost of mass transit and bus service has never been practical — witness the perennial subsides those require.
Forgiving even half the $1.6 trillion student debt would be a daunting task. Either mortgaging the assets of universities that conned students into believing an expensive liberal arts degree would yield a job paying well enough to justify hefty tuition or taxes on older generations are required. Neither is popular, so nothing happens.
College tuition has been rising even more rapidly than health care but I detect little groundswell for regulations that would force administrators to trim their numbers and student services or compel faculty to engage in less preaching and more teaching.
Democratic presidential hopefuls are railing against inequality and promising to fix those problems mostly by taxing the wealthy to benefit the working and middle classes.
Sen. Elizabeth Warren, the emerging front-runner, claims a wealth tax would generate $2.75 trillion over 10 years. This and higher corporate taxes and levies she believes could finance $800 billion in additional aid for K-12 education, $1.25 trillion for free college tuition and student debt relief, and the trillions needed for a Bernie Sanders-style Medicare-for-All system.
Independent analyses indicate her wealth tax would not raise more than half of what she claims, and none of the top-tier Democrats dare talk about the consequences of confiscation and higher personal and corporate taxes on rich folks for longer-term incentives to finance investments in new businesses and innovation — it’s the wealthy that take the risks in the Silicon Valley.
Sooner or later ballooning health-care costs will compel solutions, highways will simply collapse, and more young people will skip college and graduate school. Employers will discover they weren’t learning much at universities anyway, hire high school graduates, and run training programs and better-focused employee tuition plans that deliver more cost-effective results.
In the end, Americans will likely get either government-run health care or terribly deep subsidies for private insurance, the road and rails repaired and higher gas taxes, tolls and fares to pay for it, and perhaps some student-debt relief and free tuition — the states are already doing more of the latter.
Just like the Europeans, most Americans will end up paying half or more of their income in taxes — and be poorer to pay for it. They won’t be happy about it but will have little way out.