In the last couple of days, publications from the Wall Street Journal to the Huffington Post have noted that a new report released by the Bureau of Economic Analysis show surprising growth in personal income and consumer spending in January, and that the Affordable Care Act is responsible for fully two-thirds of the net boost of $44 billion in personal income. That is certainly a cause for celebration - both for the American economy and as vindication for those of us who aren't merely fair weather friends to Obamacare. But what the news accounts largely skipped though is the Republican responsibility for holding back what could be much better income and spending growth, therefore much stronger economic growth.
The Affordable Care Act alone boosted personal incomes in January by $34 billion by the means of delivering refundable premium tax credits - aka subsidies (worth $14.7 billion), and expanded Medicaid benefits (worth $19.2 billion). The growth in personal income other than Obamacare's boosts came from increased wages, property income, higher social security payments, and other automatic adjustments.
The drawbacks were also automatic adjustments (such as payroll taxes), except for one big factor: the result of Republican refusal to extend unemployment insurance for the long term unemployment. That move alone cost $16.7 billion from the pockets of Americans in the month of January.
In other words, if Republicans simply agreed to not take away the lifelines of millions of Americans out of work, the net boost in January to personal income would have been nearly $61 billion, instead of the current $44 billion. And if they had succeeded in repealing or halting Obamacare, personal income in January would have gotten a small $10 billion increase.
Note also that Republican governors are holding back extended Medicaid benefits for 5.4 million Americans by choosing to turn down 100% federal funding, costing the economy dearly as well.
Anyone who still thinks there is no difference between the parties, please wake up.
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