Thursday, March 21, 2013

Medicaid Expansion bill would provide access to affordable health care to citizens who currently have no hope of access, while creating new sustainable good jobs to strengthen the economy, yet Montana Republicans refuse to support it.

According to this morning's edition of the Helena Independent Record, one of the Governor's signature proposals, the Medicaid Expansion bill, HB 590, is "likely dead in the Republican controlled committees at the Legislature."  The House Human Services Subcomittee will hear testimony on the bill next Monday, but the article's author states that it is expected to be killed by the 10-6 Republican majority.  The chairman and his committee members are opposed to the Affordable Care Act and to expanding government-funded health care.  "We've opposed the ACA all along."

So what this all boils down to is that Republicans' primary objective to kill government supported services is more important than the well-being and economic security of the citizens of their state, no matter have badly the services might be needed or how much they would contribute to job creation.  

We must begin to clearly articulate the root causes of problems, the motives behind those that cause the problems, and make them crystal clear to the voters if we are to ever have any chance of reclaiming the American Dream for our children and grandchildren.  We "grey beards" were fortunate to have experienced the period of greatest American prosperity, from the 1940s through the mid-1970s when the American Dream was a reality. 

Conservatives' ideological "one solution fits all problems" twin objectives of (1) forced austerity government budgets coupled with (2) corporate tax breaks and deregulation to force privatization of  public services have repeatedly been proven to fail.  Their only result from this ideology is the sucking of wealth from the middle class into the atmospheric reaches of the ultra-wealthy.

Taking another try at using the Medicaid Expansion issue  as a "teachable moment," I wrote a guest editorial that was published by the Helena IR last Monday.

Accepting Medicaid Expansion is a win-win opportunity

The Montana legislature is considering a once-in-a-lifetime opportunity to approve the creation of the biggest jobs program of the past several decades, while improving the health of its citizens.  Medicaid Expansion, House Bill 590, has been introduced by Representative Chuck Hunter.   

According to a report by the UM Bureau of Business and Economic Research, Medicaid expansion will create 13,000 to 14,000 new jobs, and at the same time provide access for affordable health care insurance for as many as 78,000 low-income Montanans who would go without health insurance if Medicaid expansion were not approved. The program costs will be 100% funded by the federal government the first three years and 90% of the cost in each year thereafter. 

How is it possible that the Republican controlled legislature might reject this incredible opportunity?  Why would the legislature block the creation of sustainable good paying jobs and the improvement of health care for our state’s citizens?  

Montana’s Republican legislators have said they will not support Medicaid expansion because they are concerned about the program’s impact on the federal government’s budget. They claim the federal government is broke, the deficit is out of control, and it will have to borrow from China, burdening our children and grandchildren with huge debt the will have to pay off.

None of these claims are true.  All are myths and utter nonsense, propagated by small-government ideologues whose purpose is to scare citizens into accepting cuts to our safety net programs and privatizing our public services.  

The facts pertinent to our federal government’s role in our economy include the following:
·         After WWII, the federal debt-to-GDP ratio was 120%, much higher than the 70% debt-to-GDP ratio of today.  Yet, the government increased spending, the country’s economy grew, and unemployment decreased to near zero.  That period was the most prosperous period in our history.  That war debt has never been paid off, yet our economy has grown substantially and we have not been crippled by the WWII debt of our parents.

·         The United States government does not borrow money from China.  China obtains U.S. currency by selling Chinese-produced goods to American corporations that end up on our store shelves (like Wal-Mart).  They use their cash from these private sector transactions to buy U.S. bonds that earn interest.

·         When the federal government spends more in a year than it takes in from taxes, the excess money stays in our pockets.  We are never asked to pay it back!  During times of depressed economic activity like we have today, federal government deficit spending is necessary to put people back to work and put the economy back on track for growth.

·         Only our federal government can coin or print money and regulate the value thereof (U.S. Constitution Article I, Section 8).  As the sole source of all dollars in the world’s economy, the federal government can never go broke.

We must learn from history, stop obsessing over our national deficit, and recognize that the real crisis is the enormous wealth gap between the ultra-rich and the rest of us and the lack of good paying sustainable jobs that provide economic freedom for our citizens.  It is good paying jobs that create the demand to enable our local businesses to flourish and grow.  

Our leaders should be concentrating on funding real job creation as they did in the post-WWII economy.  Our federal government is strong and has the resources to move us forward; that is, unless our politicians choose austerity over infrastructure investments.

As a start, we must approve Medicaid expansion for Montana.   Medicaid Expansion will help ignite sustainable growth of Montana’s economy, bringing the right kind of new jobs to our state, jobs that improve the health of all Montanans and build a brighter future for our children.

Please ask your legislators to vote to accept Medicaid Expansion.

Tuesday, March 19, 2013

The 2013 Legislature should approve Medicaid Expansion: It's the right thing to do.

Responsible people in elected positions, who know better, have been allowing conservatives to get away with repeatedly telling us that “the federal government is just like a family, must balance its budget, and can’t spend money it doesn’t have."  The effect of that hoax on working Americans is devastating and is being used as justification by conservatives to prevent our federal government from investing in our public institutions and services  as our Framers intended when they wrote the Founding Documents.

The constant repeat of this conservative myth by the media each day, including TV, the newsprint, and the internet for the past three decades has fixed this myth as common wisdom.

It’s past time to begin calling a “spade” a “spade and to stand up for the truth even though it goes against the common wisdom.

I wrote the following letter to the editor of our local newspaper, the Helena Independent Record, in response to a published letter that claimed as his reason for denying Medicaid expansion in Montana was that "our federal government was broke and would not keep up its promise of funding support of the program."

Mr. Hull in his Friday letter “against Medicaid expansion” made several incorrect statements.

The projected benefits to Montana of accepting the Medicaid Expansion coverage were developed by a non-political University of Montana Research Center, not by Democrats as claimed by Mr. Hull.

The biggest error is his apparent belief that the federal government “has no money except what it gets from taxes from all the states and taking that money hurts the economy.” 

 Exactly the opposite is true. 

The United States government is the source of all dollars in circulation (see the U.S. Constitution, Article I, Section 8).  Therefore, the US government always has enough dollars to buy anything available for sale in US dollars. 

When the federal government spends money, it purchases goods and services from the private sector. So, it is income in your pocket book.  Only a portion of that new spending gets withdrawn from circulation by federal taxation.  The rest stays in circulation to fuel economic growth.

State governments, on the other hand, do require your tax money to fund the public services (see U.S. Constitution Article I, Section 10).

So, any public service not funded by the federal government must be funded through state and local taxes, which ultimately increases the tax burden on all Montanans.

Is this what we want?

Accepting Medicaid expansion is the right thing to do for multiple reasons.   Most importantly, it is a moral thing to do!

I applaud Governor Bullock and Democratic legislators for their commitment to Medicaid expansion for Montana.

Sunday, March 17, 2013

A Nation Must Live Up to its Means

Today, the Albuquerque Journal published the following as its "Other Voices" column in the Santa Fe section. They gave it the title "Government must deficit spend." I like mine better.
Update: This same letter was published in The Albuquerque Journal Business Oulook on March 25.

The Journal article “Belt tightening” by Kevin Hall in the March 8 Business section was so wide of the mark that it should not stand without rebuttal. The most revealing quote was from Terri Cole, president of the Greater Albuquerque Chamber of Commerce, asserting that few would disagree that both private business and the federal government “must live within their means.”

The whole article is based on the popular myth that the federal government must live within its means just like a household or private business. Bill Dunkelberg, of the National  Federation of Independent Business, rightfully lamented layoffs of 7 million small business workers. Our unemployment crisis is due largely to the wide acceptance of the government-is-like-a-household myth. Those who adhere to this myth do not understand how the economy works and cause great suffering by unnecessarily permitting prolonged periods of high unemployment.

The federal sector differs from the private sector in that the government creates the money we use. Government creates money when the private sector borrows from banks, thereby increasing private debt. And, Government creates money when it purchases goods and services from the private sector thereby increasing public debt. What money government does not retrieve in taxes from its spending contributes to the public debt and remains as savings in the private sector.

The only limit to the amount of money government can create is the availability of productive resources that might be for sale. In an economic downturn such as the one from which we are recovering too slowly, the government can employ unused productive resources without fear of inducing inflation or pushing up interest rates or destroying the stock market.

Means - Use them all.
Inflation is the result of overall demand outstripping both our ability to produce and our ability to increase production. Our budgeting process obsesses over deficits when we should be concerned with the real economy and how we deploy our immense productive capabilities both for the public good and private enterprise. To endure, our economic system must provide sufficient purchasing power to enable our people to consume all the real economic goods and services that the nation can produce.

Contrary to repetitive remarks about a “spending problem in Washington,” unemployment underlies our current crisis. People taken as a whole are spending much less than their income, as they prefer to save and pay down debt. One person’s spending is another person’s income. When spending plummets so does income and people get laid off. High unemployment is not due to lazy workers; it is due to bad public policy.

The federal government has the capability and responsibility to spend, yes deficit spend, to put people back to work. The problem with the deficit is that it is too small to support needed recovery toward a healthy economy in which productive capacity is fully utilized.

That productive capacity is the nation's “means,” which includes both public and private workers and its businesses and equipment. Private businesses, households, state and local governments must live within their means. The federal government must assure that the nation lives up to its means.