To supporters, the lesson is obvious. By wrecking the federal government through corruption and incompetence, Trump has released the economy from its crushing burden and freed it to prosper as never before. By behaving like a bull in a china shop in foreign policy, Trump has intimidated the rest of the world into doing our bidding. All is well!
Liberals like me nonetheless remain convinced that you can't keep wrecking the government through corruption and incompetence without running into problems sooner or later. I will address the subject of foreign policy later. But in the meantime, what of domestic policy. What is most likely to go wrong there.
The main focus right now is on tariffs and whether we are at the beginning of a trade war. Although I fully agree that a trade war will do no one any good, my guess is that it will not be as disastrous as many fear. Yes, some industries will take a hit, but so long as the economy continues to grow, it should be able to take up the slack. Estimates of the jobs a trade war will cost are in the six figures -- no more than the number being added monthly right now.
No, by far the most likely disaster in the immediate future is in health care. Repeated Republican attempts to repeal Obamacare in 2017 failed as Republicans learned to their astonishment that stripping 20 million people of their health insurance overnight is a surefire political loser. But that does not mean that Republicans reconciled themselves to Obamacare; it merely means that they replace sudden and outright repeal with gradual sabotage. Such attempts have failed so far, but next year may be the chance to make a real difference.
Already Republicans have repealed the individual mandate, meaning that people are not required to buy health insurance and can refrain from doing so until they develop serious medical conditions. This goes a long way toward encouraging healthy people to leave the exchanges, thereby forcing insurance companies to raise prices for the sick people who remain and inducing a death spiral.
Furthermore, for people who fear that the death spiral may take too long to materialize, Iowa and Idaho have come up with a way to accelerate it. They are allowing companies to issue "health benefit plans" that take monthly premiums to pay for subscribers' medical expenses but are not health insurance and therefore not bound by Obamacare rules, or any other rules, for that matter. This will allow companies offering such plans to achieve what Republicans consider most important -- offer low rates to health customers. Such plans will also be able to exclude people with preexisting conditions, so sick people will be uninsurable, which has always been one of the effects of Republican plans. However, as any economic royalist would assure you, completely unregulated plans will, by definition, be optimal, and if that means that sick people are uninsurable, that must be optimal, too.
The result will be that, although Republicans will not succeed in inducing a death spiral everywhere at once and crashing the exchanges altogether, they should be able to crash the exchanges in at least a few states and probably at least begin the death spiral in others.
It should go without saying that if Democrats win control of Congress (or even just one house of Congress) in November, Republicans in general and Trump in particular will blame them for anything bad that happens from then on. Unfortunately for Trump and Republicans, Obamacare premiums will start skyrocketing before the upcoming election, as sign-ups begin in October. And it will put Republicans in an awkward spot -- should they start throwing confetti and dancing for joy that Obamacare exchanges are finally crashing, or should they pretend to have regrets.
I suppose at least Republican have finally found an alternative to Obamacare -- totally unregulated plans offered at the state level. As with all major policy changes, this one will have both winners and losers. The winners will be healthy people who can pay very low rates for plans that don't cover much, but who don't need much coverage anyhow. The losers will be sick people, who will become uninsurable.
Unfortunately for Republicans, losers tend to attract a lot more attention than winners.
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