Journal Express, Knoxville, IA

March 15, 2013

Medicaid and the Federal deficit

By Charlotte Shivvers
The Journal Express

---- — 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.

I came to see “deficit” in a safer way when I looked at my own financial history: Once upon a time in my real estate career I not only had a mortgage on my home but on a number of “investment properties,” too — perhaps mortgages for $300,000 when my total net worth couldn’t have been over $100,000.

Now if we liken my “net worth” to GDP, my debt was 300 percent of my net worth and I still paid those loans and came through OK. I even made some money! Or here’s a “homier” story: when my husband and I bought our first home for $23,000 (I’m really old), our mortgage was $18,000 and we owned little else. Those debts were a deficit but they did not destroy us.

Neither will our national debt — especially not if we spend money to help more of our people get back to work!

All this is to say that the Federal deficit is not a sound reason to turn away from Federal Medicaid! Some things — like highways, law enforcement, national parks and HEALTH CARE — are too big for us to do alone.

Yes, more competition within the health care system would help (good article in recent Time magazine). Yes, we need to clean up federal expenses, especially by cutting unfair and stupid ones like subsidies to big oil and millionaire farmers. But we need to invest together to provide maximum health at minimal cost to all our people — including 150,000 more Iowans who could use Medicaid.

Healthier people can grow a healthier economy. We’re all in this together.