In 1976, as President Jimmy Carter was inaugurated, the share of all income in the United States going to the richest one percent reached an historic low. Back in 1929 just before the Great Depression, the richest one percent of Americans claimed of 24 percent of income—close to one of every four dollars—but the top one percent’s share dropped to just under 9 percent by the mid-1970s. But this was an unprecedented and momentary level of egalitarianism in the U.S. economy. Since then, America has been on a path toward ever greater income inequality. The latest data for 2012 show that the richest one percent of Americans now takes home 22.5 percent of all income. That’s a staggering statistic—22.5 percent of the economic pie in the hands of the most privileged one percent of the people. The country has come almost full circle to where things stood in 1929.
Despite spending over twice as much on health care per person as any other nation, the United States remains the only wealthy country that fails to ensure health insurance coverage for all. The United States is also the only country where the value of health insurance is widely debated. As numerous Republican-led states refuse to accept federal funding to expand Medicaid to almost all of their low-income residents, conservative critics claim that such coverage is undesirable—in effect worse than going without any kind of health insurance. In the face of such claims, it is useful to summarize what research shows about the health benefits of insurance.
A puzzling pattern has caught the attention of scholars who study public policies toward agriculture: as nations grow wealthier and more industrialized, they actually spend more on public supports for shrinking agricultural sectors. The United States is certainly a case in point. There are fewer and fewer American farmers, yet for decades Congress has regularly voted to renew costly subsidies for agricultural producers. The cost is hefty. Under the 2008 Farm Bill, for example, agricultural subsidies cost the average American taxpayer $635 annually for each of the next five years. In advanced industrial, urbanized America, why do Congressional representatives recurrently support such costly benefits for agricultural producers?
Josh Barro had a good post yesterday arguing the private health insurance market is so heavily regulated and subsidized that it’s a de facto government program run through private companies. Instead of a progressive fiscal program being performed by tax collection and benefit distribution, it’s through tax subsidies to some and not others. He’s right about this, but he left out a point that explains a lot of the outrage about rate increases (David Frum’s premiums went up around 30 percent for a comparable plan.)
Imagine an alternate universe where we were implementing food stamps for the first time. Instead of increasing taxes on higher tax brackets to pay for it, the government set up a special computer system at grocery stores. Each time someone in those higher tax brackets stepped up to the cashier, their prices would be 30 percent more than they’d been paying. That same price would then be subtracted from poorer people’s grocery bills. Seeing the same groceries you bought last month ago jump from $100 to $130 would make even the most sanguine of bleeding-heart liberals grumble about how terrible that god damn Obama-stamp program was.
The point being, this is the rare case where hiding a tax increase probably makes the policy it’s supporting less popular. People see transactions in private markets (or what appear to be private markets) as separate from the responsibilities owed to others. Hiding redistribution in private product’s price increases siphons any of the communitarian spirit that citizens get from paying taxes in the first place.
As Washington D.C. focuses on the legislative endgame for immigration reform, scholars and citizens would do well to think ahead to helping immigrants participate fully in a growing economy and a vibrant democracy. Recently, my colleagues and I at the Center for the Study of Immigrant Integration at the University of Southern California issued a report laying out possibilities and challenges. The lessons we draw for California are surely applicable elsewhere.
Introducing our latest feature: Democracy: A Podcast of Ideas. In the inaugural episode, Jason Bordoff, director of Columbia University’s Center on Global Energy Policy, joins host Jefferson Smith to discuss his essay, “There Will Be Oil,” from our Summer 2013 issue. Bordoff argues that the United States is energy rich, but is still guided by policies that assume the opposite.
Click here to visit Jefferson Smith’s Soundcloud page.
Many voters do not yet understand what is included in the Affordable Care Act signed into law by President Barack Obama in March 2010. They might be surprised to learn that the expansion of Medicaid is a major part of Obamacare. For decades, Medicaid has been a vital part of U.S. health care, and it will soon become an even more important foundation for millions of families.