Who is going to pick up the massive tab for Medicaid expansion under Obamacare?
NRO writes, “Washington offers the first taste of Medicaid expansion for free, picking up 100 cents on the dollar of the costs. Afterward, the states will be expected to pick up at most 10 percent of the cost—creating the illusion of something for nothing.”
For purposes of discussion, let’s assume that all 50 states follow the same approach, thus requiring the Federal government to kick up approximately 90% of each state’s greatly inflated Medicaid tab. Consider this: the Federal government has a fat check book, but no bank account. Yup, no need for the federal government to ever check its bank balance as there is no balance to be checked. So where does the mountain of money come from to fund each state’s huge Obamacare expansion? Three words sum it up: borrow, tax, print.
(1) The Federal government can borrow the money from you. Huh? Sure. The Federal government can borrow from you by selling you government bonds. Never mind that you will be paid crumbs in interest and will receive not one cent in interest increase over the length of your holding period. And forget the first-ever U.S. government bond downgrade. Yes indeed, under the watchful eye of Barack Obama, America’s pristine AAA government bond rating was stripped.
(2) The Federal government can borrow the money from the Chinese to fund America’s massive Medicaid expansion. But why would the Chinese want to pay for your Medicare? The American government can sell government bonds any day of the week. No need to explain why.
(3) You’ll love this option. Barack Obama can raise your taxes so you can pay for your neighbor’s Medicaid. Were this a joke.
(4) Barack Obama, tin cup in hand, can go to Mr. Bernanke at the Fed. The Fed is an unaudited private financial club, given to America by Woodrow Wilson back in 1913. The Fed can create money out of thin air. The Fed simply prints up all the money Obama needs and pumps it out into the international financial system to pay for a wide array of excess spending and borrowing. I know Mr. Bernanke is not keen on my easy-to-understand explanation and would rather call the creation of money out of thin air a digital exercise. But my explanation is easier for you comprehend.
OK, take your pick. Or perhaps combine all four options into one huge festering financing stew. It would be nice to think that there are actually some options that make sense, but there are not. And, oh yes, the doctors where I live won’t even take a Medicaid patient.