This week, Trump released his 2021 budget. It contains $800 billion worth of cuts in Medicaid over the next decade. On January 22, in an interview on CNBC when he was at the World Economic Forum in Davos, Switzerland, when pressed on the enormous budget deficits his policies have created (he has added almost $3 trillion to the national debt), he suggested that he is considering cutting Social Security and Medicare in his second term. “That’s actually the easiest of all things, if you look,” he said. And despite his pledge at the State of the Union to protect health insurance coverage for people with preexisting conditions, his administration is currently asking the courts to repeal the Affordable Care Act (Obamacare) entirely, a decision the Supreme Court has put off until after the 2020 election.
One of the reasons the nation’s deficit and debt is soaring is that Trump’s 2017 tax cut slashed tax revenues. And rather than helping regular Americans, “the plumbers, the carpenters, the cops, the teachers, the truck drivers, the pipe-fitters, the people that like me best,” as Trump put it, 60% of the tax savings went to people whose incomes were in the top 20%.
These cuts to both social programs and taxes are the end game of a movement that started in the 1930s. It is designed to take American government back to the 1920s, when Republicans led by Herbert Hoover and Calvin Coolidge turned the government over to businessmen in the belief that they alone truly knew what was best for the country. For eight years, it seemed like this system was the best ever designed as the economy appeared to boom and some men became very rich indeed.
But the Roaring Twenties came to a crashing end in 1929, and in the introspection that followed, Americans discovered that some businessmen and financiers had been cheating, while even those who were trying to live within the law were gambling with customers’ money or taking advantage of risky schemes. Meanwhile, the economic growth of the era had not translated to higher wages for workers or better pay for farmers; all the profits from the booming businesses had gone to those at the top of economy.
President Hoover, a Republican, assured Americans that the economy simply needed a self-correction. He refused any large-scale government programs to steady the nation, insisting that such government activism would destroy the “rugged individualism” that lay at the heart of the national character.
Hoover’s Democratic opponent in the 1932 election disagreed. Franklin Delano Roosevelt offered a “New Deal” to the American people, who had had their world yanked out from under them through no fault of their own. FDR maintained that the government must step in to regulate the economy to keep businessmen from cheating and to protect workers. It must provide a basic social safety net so that Americans did not starve, and it should promote infrastructure both to develop resources and to enable all Americans to share access to the modern world. In the long Depression that followed the Great Crash, Americans embraced the New Deal programs that helped them find work, offered new Social Security for the elderly and disabled, and built new roads, schools, airports, libraries, roads, and bridges all over the country. When this newly active government went on to fight and win against the Axis Powers in WWII, popular support for the new government system was cemented.
So secure was it, in fact, that Republicans themselves adopted these policies as an article of faith. When Dwight Eisenhower entered the White House in 1953, he offered his own version of the New Deal, calling it the “Middle Way” and launching the largest public works project in American history: the interstate highways. Most Americans, both Democrats and Republicans, loved the active government. It had pulled the nation out of the Depression, won a world war, and presided over a booming postwar economy.
But some Hoover Republicans resented government regulation of their businesses, and insisted that the new system was simply a redistribution of wealth. The bureaucrats necessary for enforcing regulations and providing a social safety net would cost tax dollars, forcing wealthy men to pay for government programs that benefited poorer Americans. This system infringed on their liberty, they insisted. It was socialism.
It was not socialism, of course. Socialism is a system in which the government owns the means of production. The new US system was regulated capitalism, designed to stabilize the traditional economy so it did not self-destruct again. But, calling themselves “Movement Conservatives,” these men organized to attack the New Deal government.
They had little luck convincing voters to join them in destroying the popular system. But in 1954, the Brown v. Board of Education Supreme Court decision requiring the desegregation of public schools enabled them to harness racism to their argument. Movement Conservatives harped on the idea that an activist government was using its muscle to protect African Americans. Desegregation and the programs it required to enforce, they said, cost tax dollars. Those tax dollars would come from hardworking white taxpayers to benefit African Americans. It was a redistribution of wealth that hurt white people to help African Americans.
With this appeal to racism, movement conservatives broke what had become known as the “liberal consensus.” Voters began to swing behind the Republican Party, with its promises to lower taxes and cut programs that sucked money from the nation’s “makers” to give it to the “takers.” Now, two generations later, the heirs of those Movement Conservatives have taken over the Republican Party, and they are in control of the government.
Because our government has regulated business, provided a social safety net, and promoted infrastructure since the 1930s, most Americans make the mistake of thinking that this system is here to stay. The New Deal government remains enormously popular. Americans like decent wages, and clean air and water, and bridges that don’t fall down, and roads without potholes. We like Social Security, and Medicare and Medicaid. Most Americans cannot fathom that anyone really wants to get rid of these things, and think Republicans and Democrats are both simply arguing over how the system is implemented.
But the opposition to this activist government is not a question of degree; it is ideological. Those currently in control of the Republican Party believe that government regulation destroys the liberty of men to run their businesses as they wish, and that a social safety net and infrastructure investment redistributes wealth; so, they believe, it is socialism. This system, they think, has turned Americans into “takers,” rather than “makers,” and it is destroying us.
Since he has been in office, Trump has advanced the goals of this ideological contingent, a practice that has surely helped to keep Republican leaders behind him. He has slashed business regulations and the government, leaving key positions unfilled and decimating departments. Now his new budget takes on Medicaid, and his comments about Social Security, Medicare, and the administration’s lawsuit about the Affordable Care Act suggest they, too, might soon be on the chopping block.
At long last, it seems, the dreams of the Movement Conservatives are on the verge of coming true. Trump is already saying he will make “socialism” the centerpiece of his reelection campaign. But our American system is not socialism; it is the regulated capitalism that has stabilized our economy for almost a century.
Heather Cox Richardson is a professor of history at Boston College. This was originally published in her Substack newsletter on January 17, 2020. Subscribe for free here.
8 thoughts on “Social Programs Are Not Socialism”
Heather, I follow you on Face Book and thousands of others do. Thank you for your love and sacrifice you make to educate us on a daily basis. I appreciate it very much especially during these trying turbulent political days. I realize how exhausting this must be for you because it requires so much mental energy. Blessings to you and your family. Roberto Contreras
I’d be more than happy for social security to go away. I have done at least 12 times better with investing my money thru a wealth manager in a well diversified portfolio. Social Security protects irresponsible folks who would never save while it heavily penalizes folks who are disciplined and intelligent enough to save and invest. It’s the single largest waste of money in my life. It’s depressing to see how poorly managed it is and it’s a terrible return –0.04 to –14.53 annual return depending on various factors. If all that isn’t enough… it’s in the red. More going out than coming in. It’s in real trouble. Either benefits coming out have to be reduced or taxes have to be increased.
Must be nice to be making enough to actually PUT money away. Considering how many Americans are literally living pay check to paycheck, I don’t think everyone has the ability to have a wealth manager and a diversified portfolio (part of which, I will point out, IS Social Security). God forbid there is another market crash right before you retire. My parents lost tens of thousands of dollars within weeks through no fault of their own.
Your views are naive and from a privileged state of being. Social Security is a SAFETY NET. For people who cannot afford to put enough into savings to actually survive on. But hey. We can go back to the way things were in the late 1920s. Let’s try another major market crash and Dust Bowl. Because unregulated markets and no environmental regulations worked GREAT then, didn’t it?
It amazes me how we seem to ignore a HUGE and painful part of our history…
Actually you can’t afford not to invest. Many people living paycheck to paycheck have come to realize this. With zero commission brokerages now it makes sense to teach more people to invest. Social security needs a transformation over the next decade or so. If you take an average persons lifetime amount they put into social security and put it into a TSP type investment almost everyone would retire millionaires.
Things we can encourage people to do live withen their means. Invest, pay off debt. Debt is the biggest hindrance to saving money.
I think helping people out as a safety is great but to many people want the government to take care of them.
Have to disagree there: https://i.redd.it/8pzwqvv713j41.jpg
FDR was not a socialist in either the current definition or in the definition of the time. He reacted to a situation that unfettered capitalism had created.
The complete lack of any controls on the stock market allowed for a large number of scam companies to startup, drive the stock market to unreasonable levels based on half truths and outright lies. Today they would be ponzi schemes. FDR policies forced reporting requirements and increased the oversight on publicly traded companies without restricting lawful, actual companies to trade.
The complete lack of any bank controls led first to some banks failing. As people lost faith in the banks and tried to get their money out, they created bank runs which drove otherwise solid banks out of business. FDR’s policies restored faith in the banking system and specific programs like FDIC brought millions of dollars back into the banking system. This allowed the banks to operate as engines of recovery – not victims of the situation.
FDR’s works projects had lasting effects on the infrastructure, environment and technological landscape of the US. But these were stopgap measures to deal with a particular crisis. They paid workers for work – not welfare
A true socialist of the time would have done away with the stock exchanges altogether, nationalized the banks and created government control of all businesses. FDR’s created structure to enhance the reliability of the stock market and the bankning system.
A true socialist would have created long term government construction teams that would still be working today given government’s (any government) hatred of giving up any system that they have created. FDR created temporary systems to employ people who would have starved otherwise, build significant infrastructure and let those systems fall by the wayside when no longer requried.
Not the actions of a socialist.
For those whom believe there are those who can’t save and invest you are a blinded individual. Anyone can have a wealth manager….it’s called a bank finance advisor at your local bank. Lol they can give you information on how to invest. There is a resource called investopedia which is good to have as well. Social security is usually meant for those who are too old or too disabled to work. Anyone can invest 20$ month. It’s called a secured certificate, you gain interest back to the account as it grows.
YouTube is a great friend for information as well. Just don’t fall for stupid money schemes
Can I just push back on the claim that tax revenue was slashed by President Trump. The numbers are:
FY 2021 $3.86 (estimated)
FY 2020 $3.71 trillion (estimated)
FY 2019 $3.46 trillion (actual)
FY 2018 $3.33 trillion
FY 2017 $3.32 trillion
FY 2016 $3.27 trillion
FY 2015 $3.25 trillion
It’s time to stop with the notion that higher tax rates = higher tax revenue. That’s simply not the case.