Medicaid Vs. Tax Cuts are as Simple as Guns or Butter

Occasionally, I’m reminded that I was an Economics major in college and not a historian. I was enticed into choosing economics by the use of simple graphs in Economics 101. On the first day of class, we were introduced to a supply and demand chart, which expanded by the end of the year to have dual supply and demand lines. There were S1 and S2, and D1 and D2. We always assumed there were no other variables that would only complicate the calculations. Another graph commonly used was about guns and butter, the only two products that could be purchased with a fixed amount of money. Every gun bought would directly lead to a reduction in butter and vice versa.

These assumptions had no basis in reality. Besides guns and butter, real people bought medicine, school books, clothing, cars, and homes. A million things were vying for our attention and money, and rarely were decisions as simple as the guns and butter chart led us to believe. There is one real-life example that is that simple. You can have one or the other and not both. That example would be the Trump tax cuts or the preservation of Medicaid. The same people coming for Medicaid will eventually come for Medicare and Social Security. That will require a new graph.