The GOP Budget In Charts

The Republican budget passed today passed the House initially by 215-214, passed the Senate in a 51-50 VP tie breaking vote, and passed the House the second time around by 218-214 with no amendments from the Senate version (which was slightly better than the original House version, mostly because bad non-budgetary riders were stripped from the bill). These razor thin majorities, however, have made immense changes to U.S. tax laws and federal spending that are unrivaled since the War on Poverty during LBJ's administration.

This will do irreparable harm in the next couple of years, at least, disproportionately suffered by Republican controlled areas and Republican voters, and the bill's provisions are wildly unpopular with the American public.

The big question is whether this bill, along with Trump's other horrible steps in governing, will lead to a catastrophic defeat for Republicans in the 2026 midterm elections as backlash, or whether the usual partisan tendencies will remain unchanged. Have Republicans committed political suicide? Or will the MAGA cult remain strong after encountering the "find out" part of the FAFO adventure.

I can't imagine how any decent person could sleep at night backing this proposal, and struggle to discern any values other than massively transferring wealth from the poor to benefit the rich, are served by it. But Republicans never cease to surprise me.

The big messages about the budget are that: 

(1) the tax cuts in Trump's budget are driving up the national debt immensely (more than any other bill in the Biden or Trump Administrations by a lot) and will drive up interest payments as a drain on tax revenues, 

(2) the number of people without health insurance will grow from about 25 million (out of a U.S. population of about 340 million) to more than 35 million due mostly to Medicaid changes and there will be a massive disinvestment in health care, 

(3) student loan payments for new college graduates will soar, 

(4) the clean energy investments that are eliminated will mostly hurt people in Republican Congressional districts, 

(5) the bottom 20% are much worse off, the next 20% break even very rich are much better off, while the poor are much worse off, the next 59% are modestly better off, and the top 1% and big businesses are vastly better off, and

(6) any improvements to economic growth are exceedingly small.

One key impact that the charts don't note is that many hundreds of rural hospitals (maybe more than a thousand), almost all in Republican dominated areas, will close. 

It also doesn't really capture how deep cuts to federal spending programs will be, except for defense and funds to carry out mass deportations which get big budget boosts.

The charts via the New York Times:

Why Does Japan Have Less Economic Inequality?

A short video on Facebook explained why Japan has less economic inequality than the U.S. and many other countries. It notes three main points that were particularly decisive in the 1960s.

1. High and highly progressive incomes taxes that persisted later than comparable high taxes in the U.S. in the post-war period.

2. High estate taxes that persisted later than comparable high taxes in the U.S. in the post-war period.

3. Massive land reform in 1946 coupled with inflation that undermined creditors.

Under Japan's 1946 land reform, landlords who owned more than the permitted amount had to sell the excess land to the government at a fixed price. The government then sold it at the same price, giving first preference to any tenant who had been farming the land. 

Japan’s land reform succeeded for two reasons. 

The first reason is that the Occupation had the power to impose and enforce a law that hurt the interests of a very powerful class of people, wealthy landlords, in order to bring about social and economic change. 

The second reason is more complex. At the time the land reform law was passed in October, 1946, it provided reasonable compensation to the landlords who had to sell their land to the government. But from 1946-48 Japan experienced rampant inflation, which reduced the value of the yen. As a result, while most of the buyers were able to pay off their loans within two or three years after they purchased the land, the money landlords received for their land was worth much less.

These aren't the only factors, of course. 

* The wealthy took a huge hit from the destruction of World War II.

* Urbanization gradually divorced income from land ownership.

* Japan's manufacturing based economy lasted longer than in the U.S. where deindustrialization became by the mid-1970s. 

* A mostly ethnically homogeneous society increased empathy that crossed social class lines and reduced resistance to reforms like universal health care that deep racial and cultural divides in the U.S. undermined. So did the bonding that arose from shared experiences of World War II, defeat in that war, and U.S. occupation.

* Loose land use regulation prevented the best from being the enemy of the good in the process of making affordable living possible, so that very few people were in a state of privation as extreme as now found in the U.S.