Four myths

Four myths in the GOP platform

By Danny Vinik

With the exception of a few big ideas—ban Muslims from entering the U.S., build a wall on the U.S.-Mexico border—Donald Trump’s presidential campaign has been almost entirely devoid of policy ideas. His frequent personal attacks and controversial comments created a circus-like atmosphere throughout the Republican primary, making it difficult to evaluate what U.S. policy would look like under Trump.

That’s no longer the case: the Republican Party released its platform this week. At 66 pages in length, the report lays out the policy principles of the GOP. It includes many proposals from the House GOP’s “A Better Way” policy agenda on taxes and entitlements and is sprinkled with key Trump ideas like crafting better trade deals and, surprisingly, reinstating the Glass-Steagall financial regulatory law.

The platform harshly criticizes almost every action taken by the Obama administration over the past seven years. A new agenda, the report says, is needed. However, in many cases the GOP’s arguments have key holes. Here are four cases:

1. “The president and the Democratic party have dismantled Americans’ system of healthcare.” 

Despite the political attention devoted to Obamacare, the health care law did not dismantle the U.S. health care system. In fact, the law largely only affected one part of the system: the individual insurance market. Obamacare has had nearly no effect on the Americans who receive insurance through their employers—about half the country. Millions more received coverage through the individual market, including on the Obamacare exchanges. The law has significantly reduced the number of uninsured Americans but insurers are facing high costs, resulting in significant premium increases this year. Yet, the individual market is still just a small percentage of the overall health care market.

Even on the individual market, though, Democrats didn’t dismantle the health care system. Obamacare is not a single payer system; it does not even include a public option so the government can compete with private insurers. Instead, it builds atop the current private sector system.

2. “They have nearly doubled the size of the national debt.”

At the end of 2008, gross federal debt was just under $10 trillion. By the end of last year, it was over $18 trillion. So it almost doubled, right? Technically that’s correct. But budget experts never look at debt this way because this nominal value is meaningless without context about a country’s resources to repay that debt. Therefore, experts compare a country’s debt to its economic output—its GDP—as its output represents potential revenues. For the U.S., its debt-to-GDP ratio rose from 67.7 percent to 101.8 percent during Obama’s first seven years. That’s a significant increase—but not close to a doubling.

3. “They refuse to control our borders.”

Closing the U.S.-Mexico border has been one of the defining ideas throughout Donald Trump’s campaign. But the premise of his proposal to build a wall on the border has always been flimsy. Net migration into the U.S. from Mexico hit zero in 2014. In other words, just as many Mexicans entered the U.S. as left. The number of illegal immigrations in the U.S. has also held steady at around 11 million throughout Obama’s presidency. To the chagrin of many immigration activists, the Obama administration has deported more than 2.5 million people, more than any past U.S. president. It’s a statistic that earned him the title “deporter in chief.”

One caveat: That statistic only includes people who were forcibly removed from the United States (“removals”). It does not include “returns”—people in the U.S. illegally who left the country “not based on an order of removal.” Under Bush and Clinton, there were more combined “returns” and “removals” than under Obama. But, immigration advocates argue, “returns” and “removals” do not have the same weight, as “removals” carry permanent, serious consequences. Furthermore, the immigration court backlog—a measure of the number of undocumented immigrations the administration is trying to deport—is nearing half a million. Add it all up and it’s impossible to say that the Obama administration has “refused” to control the border.

4. “The government’s own housing policies” caused the financial crisis.

That the federal government was ultimately the cause of the financial crisis has long been gospel on the right. But according to housing and finance experts, it’s untrue.

The argument goes something like this: The Community Reinvestment Act, a Carter-era law, caused banks to relax lending standards to meet affordability goals and Fannie Mae and Freddie Mac were a major force behind the bubble in sub-prime lending. The problem with this theory: Fannie Mae and Freddie Mac were actually late to the sub-prime party. As the housing bubble inflated during the mid-to-late 2000s, the government-sponsored enterprises lost significant housing share in the mortgage market, while private label securitization increased. Fannie and Freddie eventually did enter the market and lost billions on investments in sub-prime loans, eventually requiring the government to put them into conservatorship. But they weren’t behind the buildup in subprime lending. Furthermore, multiple research papers have found that loans made to lower-income borrowers under the CRA made up a small percentage of high-priced loans. Government housing policies simply weren’t the root cause of the financial crisis.