How much Does Free Health Care Actually Cost?

Well, they’re at it again! A group of possibly well-meaning Champions for the People are commuting around our lovely state of Idaho once more, advocating for what they see as a solution for health care costs that have gotten out of hand for many. Their mission? To prod our mean ‘ol state legislature – you know, the elected officials who are supposed to steward our tax dollars – to loosen up the state’s purse strings and expand Medicaid coverage. Why? To ‘help’ less fiscally endowed residents cope with the rising cost of medical care. The group’s goal? To give more people on the lower rungs of the economic ladder access to more health care at less cost, while saving save state residents tax dollars. Their means? Expanding Federal Medicaid coverage.

Sounds great and caring, right? But I have a question: can anybody really put more people on government health care subsidies while simultaneously lowering the cost and improving the quality of health care, saving the taxpayers money, and do all this without incurring any hidden costs? In other words, can increasing government intervention into a once model health care system they’ve already run into the ground on many levels, really give the people something for nothing? Haven’t we been doing this under Obamacare for nearly twelve years, now? Isn’t it time to admit that the whole idea really doesn’t work?

Hmmmm. Apparently not. The siren’s song of a free lunch still seems to overwhelm reality for the ideologically high-minded. Lowering people’s medical bills bills via government subsidies like Medicaid sounds like such a super deal! It would reduce or eliminate out-of-pocket costs for medical treatment for more low-income citizens! It would save taxpayer dollars by shifting the costs of Medicaid-covered services to the Federal government! It would help people struggling with things like drug addiction, chronic diseases and all manner of ‘debilities’ to extract as much care as they can handle out of the medical system, with no obligations to put anything back in – ever! What’s to not like about that?

Well, plenty, actually , especially if you’re the type of person who likes to think things through and consider what ‘good ideas’ might cost – especially when government largesse is involved. The argument behind the push for Medicaid expansion is that it will lower health care expenditures for people in need (with ‘neediness’ being defined according to the politics of the bureaucrats in charge of designing Medicaid), while saving taxpayers money. The proposed mechanism by which this miracle can happen consists of capturing and “bringing home” tax dollars already sent off by state residents to the Federal Government, for the purpose of being redistributed via Federally-administered, nationally subsidized health care programs. It works roughly like this:

Working people from across the nation pay tax to Washington.

Washington pools the money and parcels out some of it to cover the expense of subsidizing health care for certain citizens.

After feeding the parceled money through a huge, convoluted and expensive bureaucracy whose purpose is to decide who is most deserving of it, the leftovers are sent back to to the states according to whatever redistribution formula happens to be in vogue at the time.

Those dollars are then partially consumed by state or tribal bureaucracies in the process of getting the bit that’s left over out and into the hands of the people for whom it was earmarked by Washington.

The individuals being helped don’t actually receive the cash, of course, but they do receive the benefit of being the wards of bureaucrats who are tasked with looking out for their well-being. It’s the job of the Medicaid administrators to dole the recipients’ benefits to health care providers on the recipients’ behalf – subject to legal guidelines, of course. What the recipient ends up with is standard care at cut rate prices. Great for the recipient, but what about for everybody else? And how do the taxpayers get a savings on this deal?

Wait For It…..

The simple explanation for the ‘savings’ is…………. that all of the extra, very real, costs above and beyond the price to give health care services to the Medicaid recipients, are simply swept under the rug. The voices of those who are hurt are silenced. Those who disagree with the idea of government being responsible for the well-being of the politically favored, are castigated as being greedy and uncaring. And the economic damage done to everyone forced to work harder or do without, themselves, so that others may take freely, is rarely, if ever, counted.

While all eyes in the Medicaid debate are focused on recipients and some also consider the taxpayers, there are other actors in the equation who are also being affected, but often going unheard. Ironically, it is they who are actually the main targets of government health care regulation: the doctors, nurses and other providers of medical services to the Medicaid recipients. What would they collectively get out of a Medicaid expansion? Well, plenty, but nothing good. What Medicaid offers to providers is primarily negative incentives – punishments for not doing what the government deems is right, rather than rewards for doing what’s really in the best interests of the patients and saving time and money through making positive, productive adjustments to patient care. Negativity enters the government’s interactions with health care providers in many ways. Distrust that physicians will dispense equal or satisfactory care to subsidized patients drives the government to slam doctors with busywork documenting their interactions with patients to the governments’ satisfaction. The doctors don’t have to actually be even accused of ever having done anything wrong, the government just assumes they’ll be guilty of doling out substandard care to subsidized patients because….. well, you know…. physicians, as a group, just can’t be trusted to do the right thing like, say, Congresspeople can.

The disincentives continue into the medical cost reimbursement structure. Government cost-saving formulas dictate that medical professionals of all types are paid below-market reimbursement for their time, skill and labor if they’re treating government-sponsored patients. If that’s not enough, the government dictates that medical practices make investments into hugely expensive electronic records and other ‘advances’ and ‘safety technologies’ that haven’t really been shown to be necessary or even beneficial to most practices or patients themselves. And of course the government piles on redundant and, in some cases, simply ridiculous requirements for various medical professionals to continually prove that, after years of practicing safely and professionally, they’re actually capable of practicing safely and up to average standards.

And what do non-subsidized taxpayers end up with for all the sound and fury of government protection for the needy? Higher medical bills, greater insurance premiums and poorer medical services because the gap between what it costs to cover treatment for Medicaid patients and what the government pays medical professionals to treat, must be made up somehow. What the citizens as a whole end up with is bigger, fatter tax bills that rob working people of money with which to pay for their own health care, and an increase in the gap between the haves and the have-nots. As a bonus, the entire distinction between who is a ‘have’ and who is a ‘have-not’ becomes blurred and inverted. The ‘haves’ are now the low income and other ‘needy’ who receive their medical treatment for free, and the ‘have-nots’ are those who have to shoulder the bill to pay for the medically subsidized as well as themselves and their own families. This just doesn’t seem right, and it goes against the laws of nature. Since when should those who pay double for their care be considered privileged, and those who receive their care free of charge and obligation, be considered underserved?

Even if those who are funding the system have more money overall than do those receiving free medical services, they’re still robbed, by the force of the law, of the time, labor and income that they have to put into the system so that it can be stretched to meet the needs and wants of others. The whole arrangement winds up dinging working people, especially those who make too much to qualify for the subsidy but not enough to provide the standard of living that their labor should afford them were they not forced by the structure of the economic system to share some of their income with others. To add insult to injury, government subsidies like Medicaid also make medical care more expensive and sometimes more difficult to get for everybody who isn’t subsidized. Does that sound like a good deal to you?

A Magical Proposal To Cut the Pork Without Killing the Pig

The group that’s proposing to save taxpayer dollars by expanding Medicaid coverage isn’t advocating for getting rid of the Washington redistribution machine, rooting out user fraud, making Medicaid more difficult to obtain, putting performance standards in place to measure whether Medicaid is actually giving society a positive return on investment, or tackling the social problems that is making life on government handouts a more necessary or attractive option for growing numbers of people. They’re not asking people “what would benefit society more: to put some people on government subsidy, or reduce healthcare costs by half for everybody?” Nope. What this organization proposes is essentially to bring home the bacon without sacrificing the pig: that is, to recapture a bigger share of the dollars that state taxpayers are forced to send away to Washington by “bringing them home” (i.e. stop their redistribution to elsewhere) and redistribute them right back here in our state. The beauty of this plan is that it can easily be sold to most people as a way to reduce the number of tax dollars leaving our state, while increasing the breadth and ease of access to medical services by those who are deemed to be in need. Whether the number of tax dollars the organization is advocating to “bring home” is less than, equal to or greater than the number of dollars our citizens are forced to send off in the first place isn’t clear to me, as their public announcements don’t say. What IS clear, however, is that the proponents of Medicaid expansion see neither the redistribution machines nor the entire premise of Medicaid, as the primary problems within themselves. What they believe is that spending tax dollars at current (or even higher) levels to subsidize more and more health care for more and more people, somehow saves taxpayers money. I’m not sure I understand how that works.

Are Subsidies Cheaper Than Less Bureaucracy and Simpler, Freer Markets?

Recently, the organization in question issued a rather triumphant announcement that they had helped “save state residents over $8 million in 2019-2020” by shifting the cost of Medicaid medical treatment coverage earmarked to treat substance abusers and others in our state prison system, from state citizens to the Federal government. According to the organization, over 90% of the costs of Medicaid are covered by the Federal government instead of state citizens. Thus, by letting the Feds use tax dollars pooled from taxpayers across the nation to pay for substance abuse treatment in our state’s prisons instead of making taxpayers within the state pay for prison substance abuse treatment programs (and perhaps deciding within the state if ‘s really where taxpayers want a lot of their tax money to be spent), taxpayers within the state are supposedly being “saved” over $400 million tax dollars each year. (i.e., these are dollars that had been collected and sent to Washington to redistribute). I think their thesis is that if the Federal government collects, say $10 million tax dollars from working citizens in Idaho and uses it to subsidize, say, $8 million in health care for certain other Federally-approved citizens in Idaho (the difference between the two sums being what it costs the Washington and then state bureaucracies to collect, apportion and redistribute the taxes), then the taxpayers have saved $8 million because that $8 million is returned to them by Washington. Otherwise, they would have had to pay $10 million in taxes to Washington and pay an ADDITIONAL $8 million to cover the costs of, in this case, prison drug treatment programs, So, presto, sate taxpayers are “saved” $8 million by imply having some of what they paid to Washington paid back to them!

Sounds just wonderful, doesn’t it? Except, from a larger perspective, the math doesn’t really add up. And there are probably catches to this free lunch, right? Well, yes, and you bet there are. Anyone who thinks that prosperity can be created by shuffling money from one part of society to another, while simultaneously paying out the exorbinant sums required to feed the complex machine that makes the transfers possible, is probably someone who also believes that they could actually purchase the Brooklyn bridge for $1. In this article, I’m going to take a deep dive into what programs like Medicaid actually cost the public, and how we all secretly pay for expansion of massive Federal healthcare ‘financial assistance’ programs. The reality is that while it’s easy to think that redistributing money by cycling it through the government makes services cheaper or raises the collective good, even if the number of dollars inserted by one group of people or another at the front is returned to them from the back end, the process itself actually extracts terrible costs that are difficult to see. However, those costs are very real for everyone who has anything to do with paying taxes, receiving government services, or working to make an honest living.

Asking the Right Questions

Sometimes it’s easiest to see the issues more clearly and follow the often convoluted and barely discernable (but very powerful) ways in which actions at Points A and B can have consequences at Points C, R and Q if we start questioning how the whole system actually operates. So, I’m going to pose a series of questions that any reasonable tax payer or consumer of health care should be motivated to ask, and then think them through out loud. This should make it relatively easy to follow the line of reasoning through an often confusing system of real world relationships. It should also help connect distant consequences with their root causes. I hope this will open your eyes to what it actually costs to have the government subsidize our medical care, and some things we need to work on if we wish to drive the costs of medical care back down to the point of affordability for average working people.

Q1) How does expanding the presence of government in health care save money over leaving health care to the private sector? Or having a dual system?

The first thing to remember when arguing whether to have government involved in administrating health care, is that government creates no wealth in and of itself. All wealth is created by people generating goods and services that others wish to pay for. While government fabricates and passes out the medium of exchange (money or currency) by which both it and private citizens purchase goods and services from one another, government itself produces no goods or services. Even when it pays soldiers or legislators, government itself simply mints the money but the individuals furnish the labor which the government compensates. That money or currency then gets passed into the private sector, circulates, and creates more wealth as it pays for the goods and services created by other citizens. So, whenever somebody says the Federal Government “pays” for some program, that’s a misunderstanding. The Federal Government does not, and cannot, “pay” for anything unless it creates currency specifically to pay directly for the labor rendered on its behalf. Otherwise, it’s merely recirculating currency that you have earned by providing goods or labor for somebody else. Government captures a portion of your earned income in the form of taxes, which it then redistributes as it sees fit. When government creates currency (dollar bills and coins) out of the nothingness, fails to back it with precious metals or other enduring items with intrinsic value, and distributes the notes and coins it to the public without requiring that the recipients produce a good or service in return, it creates not wealth, but poverty as each new unit of currency dilutes the value of all other units of currency already circulating in the economy. The result is inflation and poverty, not prosperity. In the specific case of health care, the more unearned currency the government hands out, the higher the cost of health care rises.

Government, on the other hand, always demands to be paid for the labor and services provided by its workers in pursuit of its functions (in this case, in pursuit of taxing and redistributing income from those who provide goods and services to those whom the government wishes to be covered by its health care plans). Insurance companies demand to be paid, as well, too, but unlike the government, insurance companies must compete with one another and deflect pressure from health care industry lobbyists and the public if their practices become too abusive. The government, however, has no competition, and when it gets involved in making regulatory decisions, it always does so in such a way as to eliminate the option for the public to effectively opt out or the private sector to compete with it (for example, by offering better than government rates or looser regulations for the same services).

Government is not only a monopoly, but one with unlimited needs sans any fiscal checks and balances. Government never goes out of business. It only expands forever, or until it collapses the system it manages. From this perspective, then, we might want to know what makes it an inherently better choice than the private sector, for meeting the needs of the citizens in the long run? When I challenge the idea that the government is a better choice than independent groups of medical professionals, non-profit organizations, charities and business people for providing quality medical care at more affordable prices, I’m asking for evidence that a system run by personalities who collectively gravitate towards things like power, wealth and guaranteed employment, and who realistically can’t be challenged, is inherently better than a competitive public market? Both are flawed, of course, because they’re both run by humans and humans are flawed. But where is there non-partisan, non-ideological, objective evidence that, in the long term, allowing a mass of bureaucrats to control health care decisions and costs, instead of allowing those decisions to by made by lots of independent little groups composed of medical professionals, business people and allied businesses like insurance companies, results in cheaper, better care? Having once worked for a prestigious health care policy research group, I can say that honest evidence supporting the socialization (bureaucratization) of health care just isn’t there. If you’re not sure I’m speaking truthfully, simply consider the fact that government doesn’t allow precious metals, cryptocurrencies or anything else to compete with its Federal Reserve notes as legal tender. While the public is demonstrating its growing preference for precious metals and cryptos as financial alternatives to the dollar, the government is trying to either ban them, co-opt them, or artificially suppress their value and desirability. Why? So the Federal government can silently rob us of our wealth and transfer it to itself and its insider friends via taxation and continual dollar devaluation (inflation). What is it about an institution that does this, that inspires confidence that it can, and will, run our health care system in a responsible and cost-effective manner?

2) How does government actually “save tax dollars” in health care?

The simple truth is that government cuts corners and undercuts the private sector as ruthlessly as the most predatory private business cartels could – only our government does so on a greater scale, and without threat of being caught and punished. One of its favorite cheats is simply to gyp health care professionals and private health care facilities by paying below fair market rates for their knowledge and labor. Government punishes both organizations that take financial risk to open health care facilities, and hard-working individuals who spend many years in school and a lot of money to earn their professional titles, by paying them both less than their knowledge and labor would be worth in a free market. The professionals, most of whom who know they’re being cheated and aren’t sufficiently co-dependent to think that’s a great thing, respond generally in one of two ways: if they can afford to do so, they choose the ultimate opt-out by retiring early. Or they may find another, less demanding and more appropriately paid job to escape to. The exodus of highly trained health care professionals, particularly physicians, is a root cause of the increasing shortage of doctors and nurses across the country. Idaho is currently suffering from the greatest shortage of primary care physicians among all 50 states, and second to last (behind only Mississippi) in the number of physicians per capita¹. Telling medical professionals to work harder for less income so that the government and those who support an interventionist state can feel virtuous about their redistribution ethic, won’t reverse this poor statistic.

If health care professionals can’t afford to opt out of their careers directly, many opt out indirectly by providing less service while crowding in more patients per work hour to maintain their incomes. Indeed, the government FORCES them to see more patients and provide less service, or to shift medical service to cheaper and less trained assistants. It does this insidiously by taking precious time away from already too-short appointments to fill out teams of mandatory paperwork (which causes increasing environmental damage, by the way). More time spent providing voluminous documentation of the minutiae that some public policy college-grad legislative rules writer feels is important in a medical encounter, means less time for the physician to exercise his or her training and find out what’s wrong with the patient and how to best handle it from a genuinely informed medical standpoint. The result? Every patient, regardless of funding source, foots the bill for increased government intrusion in the medical clinic by receiving less time, attention and skill from the physician, or by seeing a less qualified practitioner.

Raising government burdens also harms medical professionals and thins their ranks by increasing physician and nurse frustration and burnout². This is not only unjust, but is leading to increases in rates of debility, disability and suicide, especially among primary care physicians, but also among nurses and medical students, too ^3,4,⁵ . The implementation of ObamaCare and its ethic of “faster, cheaper service for everybody, courtesy of the government” has driven physician suicides to new heights thanks to the burdens added to doctors under the “more efficient” (actually grossly less efficient) service delivery model⁶. This is a hidden cost of government “savings’ in health care. Why is it considered “socially just” to degrade and punish those who worked the hardest, sacrificed the most and took on the greatest load of professional risk (in terms of being potentially held liable for their actions) in order to do a very difficult job that is critical to maintain a healthy and productive society?

When considered in terms of the costs of time, money and energy invested and opportunities lost during youth for people to become physicians and professional nurses, their financial compensation is already too low. Punishing them by pushing it lower with the help of government discourages the most qualified young people from choosing medicine as a career path. The prospect of being underpaid as a health care professional also makes it more attractive for young people to either to accept positions in life that are easier but that don’t make use of their medical potential -which is a loss for society- or encourages them to migrate towards careers in business and finance where the potential rewards are far, far greater. How can discouraging good candidates from becoming tomorrow’s skilled doctors and nurses because the known costs relative to the potential gains is too high, be of benefit to society?

It would be of benefit to also ask how making the careers of physicians and nurses so miserable under a stingy government-run system, that young people with the dream of going into medicine are discouraged from doing what they really want to do in life? How is rigging the economy so that bright and talented young people are encouraged to settle for doing less in life, either fair to them, or good for society overall? Isn’t stealing people’s dreams so that the government can re-distribute society’s wealth towards those who have lesser ambitions in life, also a form of theft? Or is “social justice” only an entitlement for those who are less smart, less ambitious, and less interested in doing something with themselves?

3) What Are We Actually Buying With The Money Saved If We’re Being Cheap?

Some have proposed that the solution to our medical professional shortage is to import cheaper foreign doctors and nurses to take the place of American professionals. Doing so, however, ignores a variety of hidden penalties, not the least of which is the corrosive cost of allowing the latent talent in our own society rot on the vine because the government thinks investing in its own citizens is too expensive. Sure, money would be ‘saved’ if foreign doctors and nurses worked for lower salaries, but the ‘savings’ is paid for by robbing our own citizens of their human potential as well as by robbing society of the broad, diffuse social and economic benefits of having a greater number of more highly educated, ambitious, socially satisfied and higher paid members. Now I’m not opposed to allowing foreign medical professionals to work in the U.S. – anybody should be allowed to set up shop here if they’re qualified and not being brought in to undercut our own – but it’s no more our responsibility to provide jobs for medical professionals from elsewhere than it is for, say, Italy to provide jobs for our farmers or Uganda to provide jobs for our musicians.

Furthermore, importing doctors and skilled nurses to fill shortages (assuming they’re even willing to come to America at this point) ignores the option of expanding our own medical training centers. How many good jobs could be created or saved if our government saw fit to pay American health care professionals fairly, and to invest in building, staffing and maintaining the facilities required to train growing numbers of professional health care students we need? How many construction jobs would be created? Faculty jobs? Janitorial and administrative jobs? How about research jobs for medical scientists? Everybody wants a cure for cancer, but where do we think it’s going to come from? Bureaucrat drones who abuse the public at the DMV?

How much more economic activity would be generated if the government encouraged honest labor (construction labor, janitorial labor, administrative labor, teaching labor, provision of goods and supplies, and so on) to get busy providing for an expansion in the ranks of medical professionals? Wouldn’t the real wealth generated through the provision of goods and services more than make up for the government outlay required to raise reimbursement levels high enough to incentivize American citizens to become medical professionals? Or if government stayed out of the medical system altogether and let the private sector meet society’s needs all by itself? “Saving money” for the taxpayers by cheaping out medical professionals is the equivalent of jumping over dollars to pick up dimes. Sadly, because the government has for so long pumped the myth that it (somehow) generates, stewards and and saves the people’s money when it interferes with what society would provide for itself, most citizens have come to unconsciously accept this lie. This blinds us to the more complex realities and steals our ability to think through the consequences of government action. This is another layer of theft from us as a whole. If the government were genuinely interested in creating a better health care system and a better economy for all, it would recognize that paying doctors, nurses and health care facilities a ‘living wage’ relative to the time, effort and risk invested in their careers, instead of paying itself to choose who gets help and who doesn’t, would be a cheaper and better way of caring for us. The only downsides? Eliminating redistribution would reduce the growth of government and decrease its power to spread dependency and promote its political goals. A truly cost-effective system would also expose the hollowness of the morality of those who want to care for their bretheren, but only if the cost of doing so is reduced for them by being split with their neighbors. And we mustn’t have that!

4) What kind of return on investment (ROI) do most people who receive Medicaid assistance offer back to society?

It would be extremely refreshing to see actual, unbiased, long-term studies to assess the economic and social impacts of government-induced wealth transfer medical subsidies. For every $8 million spent on prison drug programs, for example, how much new wealth is created over time? How much potential lifetime physical and social debility is actually avoided? How much spending on other social welfare and police functions is eliminated over the rest of the recipients’ life? In other words, how much of the $8 million do the taxpayers who footed the original bill, get back? If the final amount isn’t more than $8 million, then the subsidy isn’t working. For those who argue that not spending the $8 million allows problems to go unfixed and eventually costs more than $8 million, I would say that the only real solution is to find whatever combination of factors works to produce end value that’s greater than the total dollars invested. Failing to do so is to engage in deficit spending and all deficit spending creates debt. All debt must eventually be paid. Failure to pay off debt over time leads to the implementation of expensive and destructive distortions as both those in charge and those who benefit from the status quo, seek to prop it up at any cost to those forced to fund it. Eventually the whole system fails and everyone, including those who are supposed to be getting ‘help’, suffers.

5) When does the support ever end?

Once an individual begins receiving a government health subsidy, how long do they usually stay on that subsidy (or another subsidy to which they may be shifted as their circumstances change)? In other words, once $8 million is spent to give a group of people free or reduced cost health care, how much more will they require? How much of your and my money will the government throw at them before they’ll be willing and able to turn around and start repaying for their help? What if they never do? Or what if they backslide repeatedly? How many times will the government use our money to intervene on their behalf? How many times, and at what cost, will they be bailed out, even if their problems are of their own making? Last but not least, what happens to the competing individuals who could have been genuinely helped by that care, but weren’t able to get it because it was already being used? Did the government have to take another $8 million in wealth from taxpaying workers who live somewhere else to cover the additional need, or were others whom the government considers less eligible, simply told to do without? Is the Federal government always fair and honest in deciding who wins and who loses in the redistribution shell game?

What would happen if we had no Federal system by which to redistribute tax-subsidized health care from wealthier states to less wealthy states? Would the citizens be empowered to save more to provide for their own care? Would they actually do that?Would the states themselves more carefully manage their budgets to prioritize affordable health case over other things? Why can’t we have a type of dual system in which each state gets to decide whether to opt out or opt in to the Federal health care subsidy budget? That would allow each state to figure out what works best for their own population. But giving the states and the citizenry such a choice would reduce the power of the Federal government – and for that reason it would never be allowed! But it would show which states and groups of citizens really believe in self reliance and free markets, and which love the idea in principle but would actually rather have socialism in practice. I think the results of such an experiment would be quite revealing.

Using Taxation To Impose One Vision of Morality On All

The bottom line is that even if we want to make sure our neighbors can afford whatever health care they or we think they need, we have to ask whether it’s fair that people in more wealthy areas – people who, as a rule, either worked harder and sacrificed more to get to where they are or who occupy the easier service jobs but don’t pull in the same amount of wealth, should be forced to send money to people in less wealthy, but also usually lower cost, states? Even if you say yes because you feel it’s your duty to rob Peter to pay for Paul’s hernia surgery, you can’t argue that paying the Federal government to shuffle tax dollars around is extremely expensive for both you and Peter.

How much money would be left in people’s pockets to buy their own health care if they weren’t paying Uncle Sam to collect it all in a pot and dole it back out as he sees fit? How much money that the Federal Government soaks up to impose the view of medical morality favored by the elites and their supporters, would be available for the more compassionate citizens to donate to their less fortunate bretheren if individuals and states were left to their own devices? Surely those who cry the loudest that we need to collectively do more, would see to it that the needy would be cared for – via the dime in their own pockets saved from the debasement of circulating through Uncle Sam’s hands? Yes?

Not only individuals but states, too, would have more with which to help their own simply by getting rid of the cost of Federal redistribution. It’s understandable that some states don’t want to do this because redistribution brings them in more than they pay out. Taxes are a good thing of you’re the privileged one getting back $2 in services for every $1 you pay out! That’s a compelling fiscal, if not moral, argument by which recipients (individuals or states) could support redistribution. But for every dollar of extra help received by one state, a dollar less is spent in another. Does the Federal government really know that the dollar spent here renders a greater financial or moral bang for the buck than a dollar spent there? Should it be up to the Federal government – the same body of policy makers that everyone derides as being elitist and out of touch – to decide what’s “fair” for every state and every citizen? What roles and responsibilities should the states have in caring for their own citizens?

If Wyoming, for example, (just a random state, I’m not trying to pick on anybody specifically) doesn’t generate enough income to pay for certain kinds of medical care for many of its rural residents, that’s sad, but should it be mandated that New Yorkers and Floridians pony up to close the gap? Maybe the Wyoming government needs to think more creatively about how to attract greater wealth to their state or add value to its residents’ output. Maybe the citizens need to run and elect legislators who will encourage them to do things that are well within every person’s means to improve their own health (such as reducing alcohol consumption, making better choices at the grocery store, establishing with a regular doctor instead of using the emergency room for non-emergency health care, and complying with their doctor’s treatment plans, for example). Maybe Wyoming legislators need to spend the state’s tax revenues more carefully, or the citizens need to accept that a lower financial standard of living is just part and parcel with a more rural economy.

A more radical but perfectly rational policy would be to encourage residents who take more than they give, to leave the state for fiscally greener pastures. Maybe the people and the legislators should, together, do a bit of all of the above, plus save their citizens the cost of redistribution by telling the IRS to take a hike.

On the flip side, perhaps citizens who feel that cost should be no object in determining what the “Federal government” should spend to take care of them, should quit complaining about not having enough where they are, and take themselves to more wealthy states with greater means and a more dependency-oriented social ethic. Perhaps hose who are aggrieved that their state doesn’t want to tax their neighbors more to pay for all the needs and wants of the poor, could help pay the poor’s moving costs to better places? People who seek subsidies move all the time to take advantage of more generous handouts elsewhere. If the states can’t control the Federal government’s predation on their citizens, then wouldn’t it be to each one’s advantage to adjust free benefits upwards or downwards in proportion to the amount of money the Federal government robs from their working taxpayers to redistribute? Who is the state supposed to prioritize, after all? Those who pull the wagon (or who have spent their productive lives contributing and have earned an honest rest), or those whose presence generally means a net social or fiscal burden on everybody else?

Do government rules to ‘protect patients’ really make patients better off? Or just more frustrated and poor?

If all the foregoing isn’t bad enough, perhaps the most deadly and ubiquitous way in which government “saves tax dollars” at grotesque expense is by making the regulations for “protecting patients” so burdensome and the punishments for not doing things entirely their way so extreme, that doctors can no longer operate small, efficient and less expensive private practices on their own. How many people aware of how much of each and every medical bill goes to pay the literal army of paper pushers now required in every medical setting just to insure compliance with every minute rule and regulation? Especially for programs like Medicaid? The cost of operating any sort of medical practice or facility to the government’s satisfaction is staggering⁷. If you want to see some shocking numbers, look up how much of the cost of each medical encounter is tied up in paying the back offices to insure regulatory compliance. This is a hidden cost of government largesse that EACH and EVERY working patient and taxpayer pays for either directly or indirectly. Ironically, the only people who do NOT bear the burden of the increased costs are the very “underprivileged” and “needy” people who create the cost in the first place by qualifying to be on government care! Those patients pay little to nothing for the services they demand, and pay few or no taxes to keep the system going. Many contribute nothing, little, or far less than the cost of their care back to society after receiving it. How many have ever done anything even remotely socially or financially worth the tax dollars or inflation the government uses to pay for their care via redistribution? Is this just, or fair, to everyone else? Certainly, in some cases this isn’t really the recipients’ fault as they would be able to pay if the government hadn’t pushed the cost of care so far above where it should be that a person with an honest but lower-paid job can no longer afford what was affordable before government stepped in to “help”. I am in no way suggesting that honest working people in need should be denied meaningful assistance. Far from it. What I’m suggesting is that if the government were out of the system, most working people wouldn’t need the government’s ‘help’ in the first place, and that voluntary contributions and incentives provided by the private sector could help subsidize those who genuinely require a hand up while rooting out free riders. The free riders and the political class they keep in power would undoubtedly dislike this arrangement, of course, but perhaps they shouldn’t be the ones that you and I and the working public should be most concerned about?

As the Government Creates Inflation, It Also Creates Dependency, Poverty, Debility and Crime. So how Does More Government Mean Less Poverty, Dependency, Debility and Crime?

I’ve been talking a lot about redistribution, and should point out that creating inflation and levying taxes are two key methods that the Federal government uses in combination to redistribute (often by subsidies such as Medicaid) the wealth created by higher income working people to lower income working people and non-working people. The beauty of this arrangement is that it achieves the government’s goals without anybody realizing what’s going on. Here’s how it works: inflation erodes the purchasing power of your dollars, but most people get raises, bigger tips, or a higher minimum wage to compensate. When taxes are calculated, you’re taxed on the total number of dollars you’ve earned, not on their purchasing power. So, the more you earn, the more tax you pay, even as you become poorer because each dollar buys you fewer goods and services (unless you’ve earned more dollars than you’ve lost in each dollar’s purchasing power, which is not the case for most people). So, you become poorer even as you earn more dollars! And the more dollars you bring in, the more you pay out in taxes because the government doesn’t tax you on the purchasing power of each dollar, it taxes you on the growing number of increasingly meaningless nominal dollars you earn- a double blow! But the people who receive your tax dollars to subsidize their medical care (or other things) are made more wealthy because they’ve just received free money, even if that money isn’t worth as much as it was, say, last year or five years ago. And they get another bonus, too. They’ll get bigger subsidies as inflation drives up the number of increasingly worthless dollars the government needs to spend to take care of them. Meanwhile, you’ll be left with less purchasing power and a higher tax burden. See how that works? Who really wins under this scenario? You don’t, until the government raises the threshold to qualify for subsidies, which it does from time to time to account for inflation. By that time, the purchasing power of your dollars is so eroded that you can no longer supply yourself and your family with anything resembling the quality of life you had 10, 20 or 30 years ago. Yet you’re older now and probably still sweating away at a job. Now you qualify for ‘help’ – especially if you’ve given up and claimed a a disability. Or maybe you can’t do that, but somebody else in your position can, and they begin to enjoy the benefits of medical care subsidy at your expense. Talk about unfair! The government subsidy ladder, which is supposed to be a tool by which citizens like you or I can climb out of financial holes we may fall into through no fault of our own, becomes an escalator to destitution and mass financial hell that drags everybody lower the more it expands. Instead of helping to preserve prosperity, government subsidies actually generate poverty and all the ills that come with it, and almost nobody understands how. Well, hopefully you do, now. And hopefully you can see that according to government logic, losing can be winning and winning can be losing. It’s become a very mixed up world, hasn’t it?

How To Get A Free Ride On the Government Escalator to Financial Hell

The potential vehicles by which our government could drag down our entire society into a mass of poverty and dependency are many, but probably the easiest and most efficient method – indeed, probably the only method by which the government can trick the people to clamor for their own slavery – is to subside everything. From rent to education to health care, subsidies create a dependency class that will lend the government its political clout for as long as the handouts last. The problem, for government, is how to persuade a people who hail from a culture that generally prides itself on virtues like independence and self-reliance, to accept cradle to grave help and see government as the source of all wealth? Slow impoverishment through double taxation and uncontrollable wealth redistribution under the guise of promoting social welfare and helping the poor, is an ideal approach. Double taxation for the purposes of wealth redistribution, when combined with inflation, are the primary drivers pushing more and more people who were once self-supporting into positions in which they “need” programs like Medicaid to help them make ends meet. As more and more working people slowly slip into positions in which government handouts become necessary, the stigma against living on the system also disappears. The dependency lifestyle deepens and the dependency mindset expands society wide. Mental and spiritual poverty both increase. The energies of human potential and agency, and even the capacity to form meaningful human connections, are siphoned off by the state, to be usurped and used for the government’s purposes.

As the government underwrites more and more aspects of a greater and greater number of people’s lives, it creates ever greater levels of dysfunction. As the mental and physical health of the collective deteriorates so does social stability. One critical result is an expanded criminal class for all the rest of society to deal with and pay for. This begs the question of how, exactly, more government, more forced redistribution and more dependency, can reduce social and economic problems? Indeed, more government will only deepen them. Perhaps the saddest part is that most decent, working people who find themselves either pushed into the ranks of the needy or standing on the sidelines wanting the government to do something to help their neighbors, won’t see how the money that’s supposedly created, spent or saved by Uncle Sam is actually driving everyone further into a financial and cultural hole. They will also fail to grasp how more “government help”, which is, in reality, financed by the people through higher taxes and inflation, is accelerating the erosion of the middle class. Government grows by draining honestly earned wealth, time, professional skill and productive manpower away from stable, hardworking people and redistributing it to three interlocking social groups: the political class, the dependency class that keeps the political class in power, and the co-dependency class that helps the government to grow the dependency class. Regular people won’t see the redistribution happening. They WILL, however, see that as time goes on, despite the additional “free help” they’re receiving, they are increasingly poor, increasingly vulnerable to being dependent, and increasingly unable to build or maintain any sort of wealth or climb the social ladder. They will also be increasingly caught up in the angst, class warfare and social violence engulfing our society. Will that make things better for most people?

The Ultimate Cost of Government Healthcare Help

Unfortunately, if the public continues to accept the idea that the government creates and/or saves money, they’ll be woefully unprepared to evaluate the true costs of Medicaid and other government programs. Because those costs are hidden, decentralized, abstract and sometimes incurred far from the source of the problem, most people will never really see where they ultimately come from. What they WILL see, however, are fewer or deteriorating hospitals and health care facilities, heavier reliance on cheaper and less-trained staff to do what a physician or skilled nurse once did, more disaffected and disengaged health care professionals taking care of them, shorter appointment times, greater wait times, higher insurance premiums, less choice and higher cost of medications and, ultimately, a three-tiered, one-payer system that is slow, inefficient, crushingly expensive and disproportionately unfair to the “privileged” who work and pay for the system, in preference for the “underprivileged” who receive care for free as well as the 1% with the wealth and political clout to create their own separate system. Class warfare will be exacerbated and the mass of good middle class Americans will be dragged into a long-term quagmire of poverty and social chaos. Expanding access to taxpayer-subsidized medical care is just one more step towards pushing our society either towards a violent, impoverished socialist hellhole, or a crushingly authoritarian, militaristic state similar to Nazi Germany. (For those who don’t accept that socialist societies are less desirable than capitalist societies, consider that there has never been even one nation that has ever progressed to truly classless, possession-less socialist ideal. All fail when the authoritarian stage in which they universally get stuck is upended by violent revolution.) Alternatively, our nation could shuffle into a giant version of the post-civil-war South complete with a new class of landless peasants (the free riders and middle class who didn’t prepare for the coming storm) and new carpet bagger barons (those who did prepare and who become the new holders of wealth and power). Or, society may simply boil down into a sort of anarchy in which citizens no longer recognize a common culture but create their own tribes that become mired in more or less endless tribal warfare. This is the state in which most of humanity has endured for most of history, so should the potential for reverting back to it really surprise anybody? Not if they look past the economic propaganda to see where their government is leading them.

Helping others is a wonderful ideal, but not if doing so involves preying on working people, failing to consider the costs and weigh them against the alternatives and their costs, or using the ideal of being our brothers’ keepers as an emotional cudgel to suppress questions and manipulate people with guilt and shame. These ways of helping out do others (and the self) no good. Pushing solutions that don’t attack the actual roots of the problems one wants to see go away is a spectacular method to multiply the very evils that the “help” was supposed to solve. It’s far past time when the public should be having honest and informed debates about the pros and cons of expanding government programs like Medicaid. Blindly applying more government to cure the problems primarily created by government is a knee-jerk cure that’s ultimately worse than the disease. If you think this is an exaggeration at best or a mean-spirited lie at worst, consider the words of 19-th century French political thinker and historian, and observer of American politics, Alexis de Tocqueville. He sagely commented that American democracy would endure until the politicians discovered that they could bribe the American people with their own money⁸. Let’s not make the body politic even more ill than it already is by draining it further with additional government fiscal leeches and co-dependents. Let’s stop accepting policy pitches that encourage lazy thinking and emotion-based responses. Lets start asking how much we’ll all have to pay in order to have the government save us money. Let’s start finding out how high the cost of free medical care really is, and private solutions to make it genuinely affordable again.

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