Home > Personal Finance > 5 Ways Your Money Could Be Affected By a Ted Cruz Presidency

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We’re still a ways from knowing who will be the next President of the United States, but, having just won the Iowa caucus, Sen. Ted Cruz (R-Texas) is among the top contenders. As such, you may want to know a little more about him and, specifically, how some of his policy proposals would affect your finances.

Whether Cruz or any other potential president will accomplish the goals outlined in their campaigns is a huge unknown; regardless, they’re helpful to review as the election gets underway. We’re putting together these summaries for all the frontrunners, and we’ve already published pieces on how a Donald Trump or Sen. Bernie Sanders presidency could affect your money. Here are some changes you might experience if Cruz wins on election day.

1. Health Care Reform

Cruz wants to repeal “every word of Obamacare,” according to his website. That would eliminate things like requirements that all Americans have health insurance (or face a penalty) and insurers cover people with pre-existing conditions (among many other things the law specifies). Depending on your personal insurance situation, that could help you save money or it could cost you more. It all really depends on how Cruz plans on enacting reforms to “make health care personal, portable, and affordable.” In short, a President Cruz would want to change the way we pay for health care.

2. A Smaller Government

Cruz proposes eliminating the Internal Revenue Service, the Department of Education, the Department of Energy, the Department of Commerce and the Department of Housing and Urban Development (HUD). He calls it his Five for Freedom plan.

If you rely on any of those departments for anything — say, you want to buy a home with an Federal Housing Administration loan, a program administered by HUD — a Cruz presidency could significantly disrupt your plans. That’s not to say he’ll get rid of everything these departments do (his website said his administration would determine if any programs need to remain intact), but it seems impossible that these departments could disappear without sending shockwaves through certain populations.

These departments do a lot of things that directly affect Americans’ finances. The Department of Education is a good example: What would happen to student loans and programs the department runs, like student loan forgiveness? Given how many people use federal student loans to pay for college and how much student loan debt Americans have ($1.3 trillion of mostly federal loans), that’s no small question. (You can see how your student loan debt may be affecting your credit by viewing your free credit report summary each month on Credit.com.)

3. A ‘More Stable Dollar’

Cruz has highlighted dollar instability as an economic woe for the U.S., saying that a highly valued dollar tends to lower prices and be good for the consumer, but that’s not good for manufacturers and exporters. A low dollar can result in the opposite, costing consumers but helping to grow the economy. He is proposing stabilizing the dollar by auditing the Federal Reserve.

“A rules-based monetary system would restore stability to the dollar and to the international currency system,” his website reads. “This will help us get beyond these cycles of boom, bust, and malaise, and return us to rising productivity, strong economic growth, and higher incomes for all.”

It’s hard to say how this proposal would affect your finances directly since stabilizing the dollar at high or low value will inherently be good for some and bad for others (and Cruz didn’t specify what he meant by “stable.”)

“The problem is there’s upsides and downsides to having a strong and weak dollar, and they both serve a purpose,” said Samuel Rines, an economist and portfolio manager with Chilton Capital in Houston. On top of that, the act of stabilizing currency is really complicated.

“Regardless of whether we wanted a stable currency, we would have to make a determination of how we would do that,” Rines said. It’s not just up to the United States. The economies of other countries affect the value of the dollar. “It would be really difficult to enact,” he said.

4. Lower Taxes

Cruz proposes a Simple Flat Tax. Instead of the seven existing tax brackets, everyone will pay a 10% income tax, but for a family of four, the first $36,000 will be tax-free. For tax year 2015, the lowest bracket starts at a 10% tax. Cruz says that tax change will increase wages by 12.2%. Note: With the proposed dissolution of the IRS, it’s unclear if you’ll have to file taxes to make sure you’re paying your required 10%. At any rate (pun intended), the way you pay taxes is likely to significantly change under a Cruz administration.

5. Job Creation

Cruz also claims that the Simple Flat Tax will create more than 4.8 million jobs. He’s also pitching approval of the Keystone Pipeline and similar projects that will expand oil, natural gas and ethanol operations, which he says will fuel job creation. So, if you’re among the 5.5% of unemployed Americans, that’s something to consider.

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  • TrickleUpPolitics

    They sound good to me. If the economy improves you won’t need a loan froM FHA.

  • Gary Roth

    He’s also talked about going back to the gold standard. A bunch of economic nonsense.

    • lachawkfan

      Why is that nonsense? Currently our currency is based on nothing but good faith. If other countries start seeing our debt problems as an issue, they will no longer take dollars and they will be worthless. With a gold standard, it is backed by something. You really should watch Ron Paul’s video and study economics.

      • Bamasux

        Because Gary Roth aka Krugman says so

    • William

      You are full of nonsense. When something of substance that has tremendous value backs up our currency, it becomes more stable.

  • JIM stone

    The flat tax revenue will not support the running of the government. Other withholding (not spoken of) Medicare, SS, would have to be increased dramatically. There is a notion that wealthy do not pay their fair share of taxes, fact is the top 1% pay over 10% of income taxes collected. The fees (taxes in disguise) will be passed to the middle class. No candidate is middle of the road on finances enough to have it work and are simply preaching to their base with pie in the sky rambling.

    • lachawkfan

      The top 5% of all earners pay 80% of all taxes! So, yes, the rich pay their fair share.

      • anon234324

        The top 10% pay 68% according to the IRS

    • guest

      If you cut government since every state has the many of the same department in them, Fact is yes all taxes eventually are paid by the consumer. An investor is looking for a certain return to cover the taxes they will pay on there earnings and in order to get those returns the consumer will pay the price (Hint: cost of doing business).

  • Marsha

    Just because Cruz SAYS all these things, doesn’t make them correct or even close to the truth. For example, his promise that a flat tax will create jobs has never been proven. Quite the contrary: every time taxes on the wealthy were lowered, the country experienced a loss of jobs. When taxes on the wealthy were raised, as under Clinton and more moderately under Obama, job growth ensued. So the statement directed to the 5.5% unemployed at present, that it’s “something to consider”, is essentially misguided, and misguiding them: it’s only true if you think Cruz’s statement has any merit.

    Similarly, repeal of Obamacare, according to Cruz, is necessary because it’s “killed jobs”, which is totally not true — the U.S. added 5.7 million private sector jobs since the ACA went into effect; because it’s “not working” — also a total lie, with millions of Americans currently insured who hadn’t been before; and because it raises health care costs, when in fact it’s slowed the increase in health care costs (and which was not amongst the goals of the ACA). Cruz has never said how he would accomplish his health care aims, and after 62 votes to repeal it, the Republican Congress hasn’t suggested anything, either.

    I think the premise of your examination is flawed. I think you really should show historical facts and economic analyses of the statements if you’re going to address this subject, which I don’t think is in your wheelhouse to begin with.

    • Bamasux

      You clearly do not understand the difference between marginal effects and overall effects and so you should not be speaking about economics at all. Job creation is incidental to wealth creation and yes, wealth has always accelerated each time taxes have been lowered and simplified globally.

      • papayaman

        Since starting with Reagan, a hugely disproportional amount of the tax-cut windfall has gone to the 0.1%. Windfalls for the super wealthy tend to be parked in savings, and speculative investments, much of this overseas. Thus, this extra $ for the so called “job creators” has little to no velocity through the economy. For this $ to be invested in jobs, there needs to be a market for the goods people in these new jobs will be creating. When the people who spend essentially all their income for daily living expenses only have crumbs at most trickle down to them, they won’t experience the increase in wealth needed to fund purchases that significantly increase demand. The rich won’t invest in jobs to satisfy an increased demand when the demand isn’t there. Most of them won’t care about this, anyway, because they’ve got theirs, and their lives tend to be structured so that they never need to come face-to-face with anyone who isn’t wealthy.

        • Bamasux

          Yes genius. Since the rich paid more in the first place, tax cuts imply that they would benefit from being able to keep a disproportionately larger share of their OWN money as compared to those who paid less tax to begin with. Math 101. A leftist’s biggest nightmare.

    • guest

      uhmm. Just because you use Democratic talking points does not make them facts.

  • disqus_Doctorlicker

    BTW….. The gold standard would be a LOT better than the quantitative easing we’ve been practicing. There will be a LOT of people in the coming months & years that will pay for it dearly.

  • JMIXO

    Why is credit.com endorsing Cruz? Trump 2016.

  • lachawkfan

    Cruz cannot pass these things without the help of Congress, for most proposals. I would love a flat tax……everyone in the game and my taxes get reduced! Lower taxes are a double plus: it creates more jobs thus takes more people off of entitlements and creates more tax payers (albeit at a lower rate but there are more of them). It does so by generating capital in business and consumer pockets. If I go spend more money, businesses will expand to accommodate more spending. This means more jobs and there is a snowball effect. Also, businesses will generally upgrade equipment and expand, hiring more people. When business and consumer demand goes up it creates jobs in trucking, construction, shipping, etc.
    Also, another big point….why are we picking on Ted Cruz? Why not compare all of the candidates? Bernie Sanders would raise everyone’s taxes and redistribute your hard earned money to someone who didn’t earn it…..which is where we are now but with Bernie’s proposals, this would be even worse…way worse. Hillary is also promising the moon and all kinds of “free” stuff to people. Where does all of that free stuff come from? My pocket book and your pocket book. This country was setup on the foundations of working hard and you become rewarded, not “work hard so we can steal it from you and give it to someone else”. I am not opposed to helping those that truly need help but it has gotten so far out of hand. Let’s take a Parent- Child relationship (the parent being the Republicans and the Child being the Democrats). The parent, of his own free will, gives his child a gift. When asked if that gift was free, the child (or Democrat) would respond, “well, yes it is”. The Parent (or Republican) would answer, “no, it wasn’t free. I worked hard and put in many hours and sacrificed buying some other good or service in order to give you this gift, but it was not free”.

  • Jeanine Skowronski

    The articles don’t represent an endorsement of any candidate. We are covering how all major candidates’ policies could potentially affect your money. You can find the Donald Trump and Bernie Sanders articles here:

    http://blog.credit.com/2016/01/5-ways-your-money-could-be-affected-by-a-donald-trump-presidency-135832/

    http://blog.credit.com/2016/01/5-ways-your-money-could-be-affected-by-a-bernie-sanders-presidency-135434/

    Thank you,

    Jeanine

  • PaulL

    You guys with your “tax increases on the wealthy”. That term is meaningless. The IRS, the government, cannot know who is wealthy.
    It’s called Income Tax for a reason. It is not Wealth Tax.

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