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@TriniGirllll You have a perverted idea of poverty. A typical lower-income person has access to TVs, cellphones, air conditioning, refrigerators, etc.— Ronald Guillemette (@raguillem) May 27, 2017
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Continuing on a young relative's comments/replies. He basically argues a Keynesian argument over a purported family's having to pay more out of their limited pockets for heathcare (vs. Medicaid) is bad for the economy. He seems to argue that oversubscribed Medicaid results in reduced benefits per person (I haven't heard of evidence of per capita reductions of benefits particularly at the end of a fiscal year.) The final exchange is with the OP.Let me warn the reader to be wary of Internet content. One link I found in Google talked about a Medicaid trust fund. There is no such thing; I think the writer was confusing Medicaid with Medicare, one of 2 trust funds associated with FICA deductions.
First comment:
Nope. The money taxed to redistribute to Medicaid at all IS in fact stolen from the private sector and hurts the economy from the get-go--only worse managed and less effective under the government. The idea that somehow because people have to pay for some of their health expenses is "bad" for the economy is hogwash Keynesian garbage. Before Big Government "solutions", there were private sector accommodations; people weren't "dying in the streets".
Again, I don't know of any cases where the government rations benefits to accommodate outlays. [I'll make the obvious exception of veterans dying on waiting lists of VA hospitals. It could be the case that Medicaid might push elective surgeries to the next funding period, although I'm unaware of that happening.] In the case of Medicare and social security, you have the trust reserves. I don't know how it handled out in the case of Medicaid; there may be fund shifts, deferral of payments, supplemental funding requests, etc. But I'm pretty sure if you qualify you get the benefits. (Of course, doctors may not want to accept you, which probably means going to a hospital) We would know if funding dried up and people were rationed near the end of the fiscal year.
If it were up to me, I would abolish ALL mandatory funding, period. But lacking that, there has been one idea that Paul Ryan has floated for years and which Trump may support, although I don't think it's going to pass over the weeks ahead--and that is block-granting Medicaid money to the states, which currently directly fund 42-50% of the cost. It's highly possible we will see the states introduce cost controls including user premiums, tightened eligibility, etc.
Second comment:
No, your point of view results from a poor understanding of economics. Your income is comprised of current spending and future spending or savings. There are some very bad effects: this is like robbing Peter to pay Paul. You "solve" today's problem by transferring expenditures to the current period, but where do you get tomorrow's spending? This is exactly the type of thinking that led to the Great Recession.
A case in point: the Nasdaq collapsed to almost a third of its value after 2000. During the Internet boom you had companies issuing multiple purchase orders trying to secure high tech gear. Once an order was fulfilled, they cancelled the others. But the tech companies overestimated the growth represented by purchase orders. It probably took 2-3 years to work through inventories (not to mention almost new gear from companies gone bust). The high demand, of course, had resulted in unsustainable price surges--just like people able to buy more house that they could afford. This pretty well killed any short-term recovery in the tech sector.
The exchange with the OP:
It sounds like the scariest game of kick the can ever played... we just do t know what generation it will effect.
It is. Historically government programs have not done well once debt exceeds the size of the economy. We're already seeing that in Greece and Japan. The GOP ran into similar issues about 12 years back under Bush. It's politically unpopular to do reforms of programs like social security, Medicare, and Medicaid. (preferably their elimination). Unfortunately, change will only happen when there's no other choice. Watch the drama going on in Illinois. Both Chicago and Illinois are sinking under the weight of an unsustainable pension system which is siphoning funds from other spending. They tried to do modest pension reform a few years back, but the Illinois Supreme Court ruled it unconstitutional. We may need to see Congress extend bankruptcy to a state level so they can be rid of their unsustainable union contracts.. Property taxes are already sky-high. Their debt is rated near junk level (high rate interest). And yet the Democrats who caused the problem are voted back into power year after year. Chicago Mayor Dead Fish is already resorting to a variation of payday loans. This will not end well.
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