Tallying The Body Count

 Paul Krugman talks with Jonathan Gruber, the health care economist who helped design the ACA, about the impact of the OBBB. What will the impact of this shit sandwich be on American health? The short answer is that we kind of won't know until it settles out.

The biggest hurdle is that they have made really stringent and frequent paperwork to stay on Medicaid. Since Medicaid covers a lot of people at the lower ends of the socio-economic ladder, that's a lot of people who simply won't be able to navigate the Byzantine paperwork. (One suggestion they make is for someone like Mamdani to propose a corps of people who will go through poor neighborhoods and help people fill out the forms.)

One underreported hurdle that I had not heard about was that they are going to hit states with hurdles to prevent them from using taxation of health care providers to smooth some of the edges off gaps in coverage. Basically, blue states have been playing a shell game with state taxes to cover up some flaws and the bill will end that.

The whole dynamic of rural hospitals is getting noticed, but what about urban hospitals in poorer communities? Waterbury, Connecticut is a poor town and they have two hospitals that serve this corner of the state. I could certainly see one of them closing soon, despite being a teaching hospital for Yale Medical School.

One stat Gruber noted was that for every 800 people that you cover with insurance, one fewer person dies. If we see people losing health care at the rates that are predicted, then 25,000 people will die per year that would not have otherwise died. 

Another statistic that they discuss is the role that government funding has made in creating the American economy. Obviously, I'm typing this on a computer and posting on the internet, two things created from the seeds of government spending. The Human Genome Project, for instance, cost the government $3 billion. Today, the biotech economic activity that was generated from that creates $6 billion in tax revenue every year. Another study suggests that for every $1 the National Institutes of Health spends, it prompts $8 of private spending and $3 of stock market value.

Among the most deeply engrained ideas on the right - the thing that unites Trump even with Thom Tillis or Mitt Romney -  is that somehow government spending doesn't count. Sure, there's the bogus "waste, fraud and abuse" line, but that's just cover for "none of that stuff is legitimate in the first place." The problem is that Keynes' basic formula for total demand includes government spending as being equal to consumer spending or business investment. In fact, it's probably more efficient in generating overall demand.

Both the OBBB and the Trump-Musk assault on the federal workforce and the impounding of funds by Trump all create a void in the heart of the American economy. The recent jobs report somehow says that government payrolls increased in the last quarter, which seems...dubious, and we should not assume that the current Executive Branch is telling the truth. Pulling all of this government spending out of the economy: Medicaid cuts, R&D cuts, firing public sector workers, the knock-on effects at the local level from all of the above: this is going to retard economic growth. 

Republicans can decry the fact that our economy is reliant on some level of government spending, but being peeved does not alter the math. 

Between the slowdown in trade prompted by Trump's tariffs, the impounding of existing funds for everything from education to medical care, the reduction in almost all government spending except for immigration enforcement and the overall instability in capital markets from the careening nature of policy under Trump, I again can't see a scenario where we don't enter a recession sooner rather than later.