The Iowa Medicaid decision connects to big economic issues:
Gov. Branstad does not want to take advantage of the Affordable Care Act’s provision for free Medicaid to 150,000 more Iowans — at no cost to Iowa for the first three years and minimal cost thereafter.
My friend and editor, Steve Woodhouse, agrees with him, as does the thoughtful letter I received from our Representative, Greg Heartsill. They say essentially that we can’t trust the government to come through for us when it is currently trillions in debt with trillions more liabilities ahead.
I say, let’s think together a few minutes, gentlemen. Let’s include Nobel Prize winning economist Paul Krugman and head of the Federal Reserve, Ben Bernanke, in the conversation. Both men have pointed out that the deficit is not the big bad boogey man threatening us; they say that our deficit is well under our gross domestic product or GDP — 75 percent in fact — and Krugman recently pointed out that the deficit is actually decreasing, “falling more rapidly than it has for generations.” (New York Times, 3-11-13).
They would not deprive Iowa’s unlucky poor of Medicaid out of fear about the U.S. deficit.
A larger threat than the deficit is unemployment and our slow, steady recovery has gotten that number down to 7.7 percent. Ironically the deficit is a good reason for that improvement. Government spending which created the deficit has also aided employment, and employment grows in a self-supporting way: if I have a job I can pay for more goods and services and you earn more money for providing those goods and services. My spending is your income and your spending is my income. And we grow employment together — paying our fair share of the taxes again, too. Much of the government spending that caused the deficit pushed us along on the way to recovery.