Excerpts from: http://www.federalisminaction.com/resources/studies/study-4/#sthash.PuLhqT6q.ltVUmL2p.dpuf
Three reasons states should avoid expanding Medicaid via
Obamacare:
#1 – Public Sector Growth Crowds Out the Job-Creating,
Wealth Creating Private Sector and Stymies Future Economic Growth
#2 – There is Significant Positive Correlation Between Per
Household Personal Income with the Size of the Private Sector!
#3 – How Could Any State, in Good Conscience, Justify More
Dependence on the Federal Government? The National Debt is $18-Trillion and
Medicare is Already a Bankrupt Program!
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#1 - Public Sector Growth Crowds Out the Job-Creating, Wealth
Creating Private Sector and Stymies Future Economic Growth
Incremental job growth, new income and new wealth is only
accomplished through the private sector. Jobs created in the public sector are not a
net gain to the economy as the salaries are paid by taxpayers. When the public
sector competes with the private sector, it crowds out the job-creating sector.
“Only the private sector can generate new income and wealth in an economy.
Government spending, on the other, is the redistribution income first extracted
by taxes. Yet, the very process of redistribution comes at a very high economic
cost.”
Only the private sector creates new income. The public
sector, in contrast, can only redistribute income through taxes and spending.
More specifically, public sector spending consists of personal current transfer
receipts (Medicare, Medicaid, Social Security, etc.) and government employee
compensation (federal, state, and local).
This does not necessarily mean the elimination of existing
household income or jobs. It does mean that future income increases and job
creation will be lower than they would be in the absence of higher taxes and
spending.
Growth of the public sector grows through:
- Taxes taken from the private sector or
- Printing of money which causes inflation for private sector or
- Selling of bonds which must be paid back in the future by the private sector! In the meantime, the increased interest payments must be paid by someone . . . so you raise taxes or print more money!
#2 - There is significant positive correlation between per
household personal income with the private sector share of personal income. The
bigger the private sector, the greater per household personal income. A 1%
decrease in the size of the private sector yields a decrease in per household
income of approximately $3,208.
Consider the difference between Maine and New Hampshire as Maine pursued policies to increase public sector spending
and their personal income eroded when compared to New Hampshire which shied away from such vast public sector growth policies.
#3 - The fix is in finding local solutions to fix
healthcare, not on a federal one-size-fits-all approach. Instead of looking for
more federal funding, states should find ways to reduce government programs
instead of programs that leave the state more dependent on a federal government
that is already broke.
