Reagan-Era Inequalities Finally Addressed

An article by David Leonhardt from The New York Times:

For all the political and economic uncertainties about health reform, at least one thing seems clear: The bill that President Obama signed on Tuesday is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.

Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rates have fallen more than rates for the middle class and poor.

The bill is the most sweeping piece of federal legislation since Medicare was passed in 1965. It aims to smooth out one of the roughest edges in American society — the inability of many people to afford medical care after they lose a job or get sick. And it would do so in large measure by taxing the rich.

A big chunk of the money to pay for the bill comes from lifting payroll taxes on households making more than $250,000. On average, the annual tax bill for households making more than $1 million a year will rise by $46,000 in 2013, according to the Tax Policy Center, a Washington research group. Another major piece of financing would cut government subsidies to private insurers in Medicare, ultimately affecting their executives and shareholders.

The benefits, meanwhile, flow mostly to households making less than four times the poverty level — $88,200 for a family of four people. Those without insurance in this group will become eligible to receive subsidies or to join Medicaid. (Many of the poor are already covered by Medicaid.) Insurance costs are also likely to drop for higher-income workers at small companies.

Finally, the bill will also reduce a different kind of inequality. In the broadest sense, insurance is meant to spread the costs of an individual’s misfortune — illness, death, fire, flood — across society. Since the late 1970s, though, the share of Americans with health insurance has shrunk. As a result, the gap between the economic well-being of the sick and the healthy has been growing, at virtually every level of the income distribution.

I thought this was an interesting article. Simply put, it states that since Reagan had taken office in the eighties, and ever since Republicans have adopted him as their spiritual savior, inequalities have raised, and while nobody is calling to eliminate disparities between the rich and the poor, the fact of the matter is the rich keep getting richer at the expense of the poor, and the whole system spirals out of control. This health care bill is supposed to correct that, or at least work towards correcting that. While the exact results cannot be immediately measured, one thing is certain with today's historic signing - change is on it's way.

Sure Republicans can have some gains at the polls this year, but so could Democrats. The real question is what future congresses will do to continue reform. Will Republicans make any attempt to help Americans, or will they continue with their anti-Obama obstructionist policies? Only time will tell, but I predict Americans will come to understand the benefits of the health bill and realize it's passage is for the benefit of all Americans.