An Explosion of Misery
Making American hungry and uninsured again
PAUL KRUGMAN
Contrary to what Trump administration officials say, we are not experiencing explosive economic growth.
We are, however, experiencing an explosion in misery — and Donald Trump deserves full credit.
Hi, Paul Krugman here, slightly different location.
I want to talk about food stamps and health insurance, two areas where things have gotten dramatically worse just in the past year and are continuing to get worse.
There's going to be a lot more hungry people in America, especially hungry children, by the end of this year, and a lot more people without health insurance or with inadequate health insurance.
And it all can be tied directly to legislative action or inaction on the part the Trump administration and its allies.
Here's what has happened.
So we have what everybody still calls food stamps, though it's officially Supplemental Nutrition Assistance Program.
But we have a situation now where the One Big Beautiful Bill didn't exactly cut the rate of benefits, but what it did was to impose work requirements.
You might say, well,shouldn't people who can work work?
Yeah, but that's not really what's happening.
What's happening is that people who can work and do work —because among those who can work who are receiving food stamps, the vast majority do in fact work — must show proof of work.
And that is, for many such people, a basically impossible burden.
I mean, think of who is likely to be on food stamps.
They may well be irregularly employed.
They certainly may not have a job where they can call up the HR department and get the necessary forms.
They are also presented with a complicated paperwork requirement.
We're talking about people who are, to some extent, lacking in formal education.
But above all — I've never been poor, thank God — but as everyone who's studied or been poor can tell you, the biggest issue of poverty in some sense is the cognitive burden, the constant struggle to just make ends meet, which is a huge burden on everything else.
So you're imposing a bureaucratic hurdle, really a bureaucratic barricade in front of exactly the people least able to get across it.
So of course, we're seeing a lot of people losing nutritional assistance with millions of those people children.
Health insurance is a rather different story.
The Affordable Care Act made a huge positive difference to many people's lives — in this case some people I do know quite well, small business people and so on.
But the way it was set up, there are subsidies to help you purchase insurance through the exchanges.
The subsidies are means tested.
I could not get a subsidy for health insurance, nor should I.
So they fade out with income.
But as originally set up, they faded out too quickly with rising income, and there was a cliff at 400% of the poverty line, no more subsidies, which was clearly bad policy.
And they knew that at the time.
It was just that trying to scrape together enough votes to get that thing enacted was hard.
So during the Biden years, the subsidy program was improved.
It became somewhat more generous, but more important, it no longer had a cliff. It just gradually faded out.
Unfortunately, that was not a permanent change.
It wasn't enacted into legislation for forever.
There was a cutoff date.
Why?
Well, two words, Joe Manchin.
But in any case, obviously, Trump and Republicans in Congress refuse to even contemplate extending those enhanced benefits.
And so a lot of people are now faced with vastly higher costs if they want to retain their health insurance.
Interestingly, these are not the poorest.
The poorest are going to be on Medicaid and even people a little bit above that are still going to have the full subsidy.
But it's people in the middle class whose income is a little above 400% of the poverty line and suddenly have no subsidy available.
That is a hardship for, again, millions of people.
So far we know that enrollment on the exchanges that were set up to buy health insurance has dropped by about three million so far.
Probably a lot more to come.
And probably that understates the loss because people trying to save money because things are more expensive are in many cases stepping down to less comprehensive plans.
So there's an increase in the number of underinsured too.
Which means that a large number of Americans who had adequate health insurance no longer do.
How should we think about all of this?
The Trump administration has put out a report on the decline in Affordable Care Act enrollment, which is really a blood-boiling document because it portrays the big rise in enrollment that took place during the Biden years as a problem because it was an increase in fraud.
Now, is there fraud?
Yes, there's fraud in the Affordable Care Act.
Is there fraud in the food stamp program?
Yes — there's fraud in every program, public and private sector as well.
There's fraud in the endless pasta deal at Olive Garden.
There's fraud in frequent flyer schemes.
There is no reason to believe that there is significant fraud in the sense that it's a significant, important part of any of these programs.
And one thing that you always want to bear in mind when we're talking about these means-tested programs is how cheap they are.
The average food stamp recipient receives $187 a month in nutritional assistance — $187 a month, a little over $2,000 a year.
Maybe one way to put that in context is to say that Donald Trump's East Wing Ballroom Project, the one that is so far still just a hole in the ground and hopefully will never be finished, is costing $600 million.
So that project alone, that scam, because we know that there's a lot of corruption involved, that is the equivalent of food stamps for 300,000 people for a year.
So the things that we're talking about here are, it's not really about the money.
It is one of those “the cruelty is the point” stories.
And we could go on about that, but clearly the fact that a lot of people are going to suffer is not an unintended byproduct of these policies.
It is kind of, in some ways, the goal.
It's also enormously destructive, not just for people's lives now, but for the future.
One of the best established facts about the benefits of government spending is that nutritional and health assistance to children pays off for society as a whole.
That children who received food stamps or Medicaid in their early years grow up to be healthier, more productive adults who pay more in taxes and are less likely to need government assistance.
The rates of return on both the food stamp program and Medicaid, the original aid for health care for the poor, are enormous.
They're far bigger, far better substantiated than almost anything else you can do.
If you ask, you know, what do we know about the payoff to infrastructure investment?
Well, we think it's pretty big, but... that's not based on solid evidence.
The evidence on these programs is enormous.
So by cutting back on these programs, by creating this explosion of misery, they're not only making millions of Americans much, much poorer than they were, they're also making the country as a whole substantially poorer in the long run.
It's an anti-growth policy.
But of course, the cruelty is the point.
And here we are.
Many things happen to the economy, many things happen to society that are outside the control of the guy in the White House.
Many bad things aren't really the fault of the party in power.
This is absolutely, totally Donald Trump's fault.
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