ONE constant in American politics is liberals' blind faith in government spending as an economic cure-all and their unwarranted skepticism of the private sector.
Supporters of Obamacare, particularly its expansion of Medicaid, often claim it will ultimately foster demand for new health care jobs and generate enough associated tax revenue to offset its cost. At the same time, many left-wing groups actively oppose tax breaks for businesses that create jobs in reality, not just in theory.
Earlier this year, Richard Boone, chairman of the Tulsa Metro Chamber's health care task force, was among those touting Obamacare as a pro-health care jobs policy, even calling Obamacare's Medicaid expansion “the best economic development deal the state has seen in decades.”
Yet Massachusetts, the model for Obamacare, struggles with doctor shortages. According to the recent Massachusetts Medical Society Physician Workforce Study, the state has a critical shortage of doctors in neurosurgery, internal medicine, urology and psychiatry, and a severe doctor shortage in family medicine, dermatology and general surgery. Community hospitals reported a 94.1 percent rate of “significant difficulty to fill vacancies.”
Even though 97 percent of Massachusetts citizens had insurance, 32.8 percent indicated a problem obtaining health care. That suggests Boone has it wrong and government spending and associated regulations don't incentivize people to enter a profession the way that free-market forces do.
Health care professionals may not be government employees in the traditional sense, but they depend substantially on government programs for payment — and Medicaid expansion would further crowd out private dollars and market forces in the system. Estimates show that Medicaid expansion will cost Oklahomans at least $789 million in state taxes by 2019 plus our share of $13.4 billion in federal taxes.
Gov. Mary Fallin's office estimates the state's Medicaid bill would be $103 million per year higher by 2020 if we expand the program. That figure is worth noting, because it's roughly the same amount provided to energy producers through horizontal drilling tax breaks. Yet those who see Medicaid expansion as economically beneficial consider the drilling tax breaks “unnecessary and unaffordable,” as the Oklahoma Policy Institute recently put it.
That's despite the fact the oil industry has actually created good-paying jobs in Oklahoma and elsewhere. Margo Thorning, senior vice president for The American Council for Capital Formation, has noted the energy industry added 100,000 jobs since the start of the recession, and another 2 million could be created over the next two decades.
It defies logic to argue that spending $100 million on government growth is a job creator, but leaving $100 million with actual employers is not. Furthermore, if the goal is job creation, lawmakers should favor policies leaving money in the private sector over policies redirecting it to the government. As columnist Robert J. Samuelson noted this year, public-sector employment “grows only when government claims some private-sector income to pay its workers. Government is not creating jobs. It's substituting public-sector workers for private-sector workers.”
The debate is not whether government spending truly creates jobs — it doesn't — but whether the benefit of a specific government program justifies the tax-induced loss of private-sector productivity and job creation. On the job-creation front, Oklahoma's oil-and-gas tax breaks are succeeding. Medicaid expansion is a non sequitur.