Healthcare, the lottery, and the economics of poverty
There is no question that this bill will hurt the majority of Americans. It only benefits the ultra-rich, who will receive a large tax break, and the GOP, who get to act like this is a victory even though it is a disaster for much of their core constituency.
Instead of focusing on those points, I want to talk about something that struck me about the bill as I was watching John Oliver’s most recent episode of Last Week Tonight. There are six pages in the bill dedicated to provisions for states to dis-enroll people who win big in the lottery.
I hate the lottery.
At its core, the lottery is a mechanism by which the government can secure funding by selling (99.99%) false hope to it’s citizens. We may not realize it, but lotteries can generate a staggering amount of revenue for state governments.
According to The North American Association of State and Provincial Lotteries, the various contests have generated as much as $70 billion dollars in past years. Based on the Census Bureau’s population clock, that comes out to about $216 of revenue per person. The idea of taxing people that much is abhorrent, but even conservative lawmakers are willing to take the same mount in the form of lottery revenue.
The government’s stance on gambling is complicated. On one hand, most state governments frown upon gambling, but on the other hand most state governments are willing to profit off of a large scale gambling scheme with just about the worst possible odds for its players.
As many analysts have noted, lottery revenue is often used to replace other sources of government funding for these purposes rather than supplement it. To the average American, the phrase “ lottery winnings go to fund education” sounds like it’s going to result in an overall increase in education funding. However, this is clearly not the case.
Sometimes the funds do go toward their purported uses, whether it’s education, environmental protection, or services for the elderly. But in many cases, like in my home state of California, education funding decreases as lottery revenue comes in. This results in at best minimal increases to the education budget.
Getting back to the American Health Care Act, I have what may be an unconventional take on the GOP’s fixation on lottery winners in this bill.
I am willing to bet that most GOP lawmakers love the lottery. Ever since the Reagan years, Republicans have branded themselves as firmly opposed to any sort of taxation. This means they have to get creative with the ways they extract funding from their constituents.
GOP lawmakers spent so much time on the lottery in this bill because they want people to buy more tickets. Expending so much effort on it sends a subtle signal that you and I have a not insignificant chance of winning the lottery. Otherwise, why would they go to such great lengths to prepare for it?
The GOP wants us to keep shelling out our hard-earned income on the lottery so that they can keep receiving the funding from it. Including these lottery provisions is likely both a way of signaling that it’s worth the investment and a necessity of our labyrinthine tax code.
At best, the lottery is a glimmer of hope for people who might have otherwise lost it. At worst, it is a mechanism to profit off of poverty and prevent people from actually bettering their lives.
It is widely known that people with lower socioeconomic status spend a larger portion of their income on lottery tickets than those in higher strata. This makes perfect sense. People who struggle to feed their families on poverty wages are much more likely to see the appeal in a get-rich-quick opportunity than people living comfortably in the upper middle class.
A less-discussed psychological implication of the lottery, however is that it increases our tolerance for more risky economic behavior.
Edmund Burke, the famous Irish philosopher and statesman, saw great danger in government-sponsored gambling. He linked the existence of gambling programs to greater trends of economic speculation and risk-taking in the interest of amassing riches. Much of our modern economy is based on gambling dressed up as investment banking schemes and large-scale speculation.
To be fair, there are important differences between investing and gambling. Investment could be considered oil in the engine of capitalism, which most would consider to be a good thing.
However, to people like me who would prefer a more restrained version of capitalism, many aspects of the financial industry seem to be very rich individuals gambling with money belonging to middle and working class people. The 2008 financial crisis, for example, was largely a result of an increased reliance by investment bankers on subprime loans despite the risk factor of those loans remaining just as high as it ever was.
Imagine you are at a casino, and you bet $200 on a roulette spin. You lose, so you go get ten of your friends, tell each of them to bet $500 on the same exact odds. They all lose too, and now you lost all of your friends’ money.
That’s essentially what happened before the great recession.
Our tolerance for gambling on the small scale, like the lottery, becomes tolerance for gambling on a larger scale, like risky investment banking schemes. The GOP, who is strongly in favor of de-regulating the banking industry, want to normalize gambling so that we accept the risks involved with allowing a select few private individuals to have nearly unfettered control of our economic well-being.
Bringing us once again back to the AHCA, this healthcare plan will place more power in the hands of private corporations that are likely to become less and less regulated under GOP control. This is part of what will be an orgiastic frenzy of unrestrained capitalistic risk-taking that will unfold over the next four years. The fact that provisions which further normalize risky economic behavior exist in this healthcare legislation worries me. It’s important that we do what we can to build up a more stable economy in years to come, and the AHCA is the exact opposite of that.
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If you agree or disagree with me, I’d love to hear why. And if you want to see more from me, follow me here, on Twitter @JeremyCummings3 or on Instagram @so.tall.im.in.space. Stay woke, my friends.