Early in his presidency, Barack Obama met with several economists, many of whom stressed to him that the most pressing problem facing the nation was our extreme level of income disparity. Somehow Obama missed the message and decided to focus on health care reform instead, eventually passing the Affordable Care Act. Our income disparity problem still hasn’t been addressed.
Obama’s focus on health care reform was a mistake for a couple of reasons. First, it chewed up a lot of the new administration’s political capital on a highly divisive issue that ended up creating a tremendous amount of animosity on Capitol Hill. The second, and more important, reason is that fixing income disparity first would have made fixing health care — and, indeed, all other problems — much easier. If the working poor and the lower middle class had higher incomes, affording health insurance would be much less of a problem. In fact, many of these people might enter the market and get insurance for themselves, reducing the need for government assistance. As a side note, there is a whole myriad of issues — student loan debt, divorce rates, crime rates, mortgage defaults — that would be less problematic if lower-income Americans were taking home higher paychecks.
The fact that extreme income disparity affects almost every social, economic and fiscal issue that our country faces makes it the No. 1 problem of our times. Addressing this issue properly would reduce the amount of government involvement that might be needed to solve each of the other issues. And, if the right policies are chosen, fixing our extreme level of income disparity can also be accomplished without increasing the deficit or expanding the size of our government.
Unfortunately, this issue isn’t on the Republicans’ radar. They’re too busy finding ways to cut taxes for the rich, eliminating assistance programs (without first reducing the need for such programs), and boosting an already bloated military budget. And, because they’ve been promising their voters a repeal of the Affordable Care Act for the last seven years, they’re falling into the same trap as Obama did. They’re spending tremendous amounts of political capital fighting a highly divisive battle over an issue that would be easier to solve if we simply had less income disparity in our country. Good luck with that.
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Aaron Swisher is an economist and the author of “Resuscitating America” — An Independent Voter’s Guide to Restoring the American Dream.