Prof. Sven Wilson, Brigham Young University, recently responded to my op-ed on how expanding Medicaid will downshift the long-run economic growth in Utah. He accuses me of trying to “muddle this clear choice” for Medicaid expansion, but it is Wilson’s choice that fails on moral, economic, and good governance grounds.
First, Wilson is incorrect when he says that the most vulnerable among us will benefit from Medicaid expansion. According to the Foundation for Government Accountability, the vast majority of new Medicaid enrollees in Utah will be able-bodied, childless adults, not struggling single moms, the elderly, or the disabled as he implies. Instead of extending coverage to those who need it most, Medicaid expansion will jeopardize care for the most vulnerable.
Second, Wilson’s claim to be a “conservative, free-market economist” fails on several counts. He touts the theories of the liberal economist Keynes, clearly forgetting his training at the University of Chicago—where Milton Friedman once taught—that there is both a demand and a supply curve. Medicaid expansion will distort Utah’s supply-side of the economy away from market chosen activities to politically chosen activities, thereby downshifting long-run economic growth.
Wilson’s case in support of Keynesian multipliers leads one to the nonsensical conclusion that there are no limits to government spending. He ignores the Law of Diminishing Returns and never sets a point at which more government spending becomes counterproductive—is it 20 percent of GDP? 60 percent? What about 100 percent?
Wilson claims “no serious economist of any political stripe thinks the multiplier is negative.” This is willful ignorance of the work of Stephen Brown, Kathy Hayes, and Lori Taylor. Their study found “…a large public sector crowds out and substitutes for growth in private labor and capital.”
Finally, expanding Medicaid is no way for Utah, or any state, to practice good governance. Obamacare’s Medicaid expansion is a ploy to force Utah to cede authority to the federal government, all in pursuit of “free” money. In essence, Wilson would like Utah taxpayers to be bought off with their own money. Instead, states need to say enough is enough and demand that the federal government must stop bullying the states.
Wilson and other Medicaid expansion proponents are ignoring economic realities, supporting a failure of federalism, and worst of all, putting our most vulnerable citizens at risk.