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An Explosion of Misery
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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