Monday, November 9, 2015

So, What if the Republicans Win Next Year

So, what do I expect to happen if the Republicans do win the White House next year?  They will hold all levers of power in the federal government and have a free hand to do whatever they want.  What will they actually do?

Well, first and foremost, my guess is that they will lose all interest in deficit cutting, and all resistance to raising the debt ceiling.  Deficits only matter when a Democrat is in the White House.  Hardliners will no doubt be convinced to raise the debt ceiling on the theory that it will take some time to correct eight years of Democrat profligacy.  And even if they vote no, a solid Republican majority will vote yes, so problem solved.

Pressure will be strong to repeal Obamacare.  I think it unlikely that they will actually do it, because repealing Obamacare will mean stripping ten to twenty million people of their health insurance overnight.  Too risky.  More likely, they will repeal the individual mandate.  The individual mandate is unpopular, so repealing it should be easy.  This will have the result of encouraging people not to buy insurance until they are sick, thereby raising prices, driving out healthy people, and driving prices even higher.  Death spiral!  Of course, it will be impolitic to openly come out in favor of causing insurance prices to spiral out of most people's price range!  Better be careful of letting your memos leak!  Republicans can hope to a considerable extent even to escape blame for spiraling prices.  Just blame it on Obamacare!  On the other hand, if prices spiral too high while they are in power, they may come under pressure to do something about them.

Having wrecked the exchanges, Republicans will then probably proceed to block grant Medicaid, and probably most other programs for the poor.  This will allow them to avoid immediate catastrophe, which they would be blamed for, and instead, slowly squeeze these programs to death by underfunding, while letting the states be blamed.

I do not expect Republicans to touch Social Security or Medicare.  That is simply too unpopular, even if only future beneficiaries are to be affected.

They will certainly escalate any number of conflicts in the Middle East.  They will probably try to avoid a full-scale ground war.  But when each escalation fails to produce the desired results, ground war is a very real possibility.

And obviously, they will make huge tax cuts that blow a hole in the budget.  Marco Rubio, one of the saner Republican candidates, plans to cut taxes by about a quarter.  And also to increase defense spending, not touch Social Security and Medicare for current beneficiaries, and pass a balanced budget amendment.  In theory, to do all those things and meet the interest on the national debt, he would have to cut all other spending to -- zero.  Of course, that won't happen.  More likely, Republicans in power will pass a massive, budget-busting tax cut.  They will attempt to pass a balanced budget amendment, be blocked by Democrats, and denounce liberal profligacy.  They will then make tiny but much-trumpeted cuts in spending and cheerfully coast along by borrowing until the next time a Democrat is elected, at which point they will freak out over those massive deficits and blame them on big-spending Democrats.

Republicans justify tax cuts on two grounds:

  1. They spur such economic growth that revenue actually increases and there is no need for spending cuts.
  2. They choke off revenue and thereby force a fiscal crisis and "starve the beast."
Obviously these can't both be true.  But they make a great game of head-I-win-tails-you-lose.  If tax cuts increase revenues, great, it avoids hard choices.  If they reduce revenue, great, we want a fiscal crisis anyhow.  Let's just hope it takes place with a Democrat in power.  And, in fact, the government has shown remarkable ability to borrow in seemingly unlimited amounts without consequences. Fiscal crises are largely a matter of choice.  Which works even better for Republicans.  Coast along borrowing as long as you want so long as you control the White House.  Once the Democrats commit the unspeakable outrage of winning the Presidency, set off a fiscal crisis, force him to take unpopular measures, and then ride the backlash to an even bigger majority next election.

But there is one natural limit finance by borrowing.  Over time, interest on the national debt will consume a larger and larger share of total revenue and gradually crowd out other items.  This happened to some degree with the Reagan deficits.  It will happen much more slowly now since interest rates are much lower.  But cutting revenues by a quarter should be a good way to get the process started.  The only problem is that, since it is gradual and not catastrophic, there is no way to control which party will control the White House when the pressure becomes unbearable.

And finally, Republicans will also no doubt move quickly to shut down any alternative energy sources that might reduce greenhouse gas emissions, and do their best to keep any other countries from cutting their emissions. With a little luck, they may be able to delay action on global warming long enough for it to pass an irreversible tipping point so that all attempts to stop it will be futile, so we might as well just keep burning fossil fuels.  Hurray!

In short, if Republicans gain the White House next year, I expect them to modify some of the crazy. But what even their saner representatives will do is bad enough.  They must be stopped.

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