Medicare Cuts Would Be Bad For Business?

That’s what one study says by liberal, pro-government health care group Families USA says, but their reasoning could only appeal to those ignorant of economic reality. They argue that less government spending means less economic stimulus.

FARGO – Proposed Medicare cuts floated as part of a budget-balancing plan would translate into a significant loss of business activity and jobs, according to a study by an advocacy group.

Medicaid, which provides health care coverage for the poor and disabled as well as those in nursing homes, is a partnership between the federal and state governments.

The costly “entitlement” program is under scrutiny as Washington grapples to tame the federal budget deficit.

“Every federal Medicaid dollar that flows into a state stimulates state business activity and generates jobs,” Ron Pollock, executive director of Families USA, which released the study, said in a statement.

In the aftermath of Obama’s stimulus spending disaster we really shouldn’t have to debate any more about whether or not government spending stimulates the economy. But apparently this is one argument that just won’t go away.

In a national budget environment where we had no debt and no budget deficits we could say that this argument is nonsense because every dollar the government spends is a dollar it first takes from we taxpayers. You cannot say that Medicare spending stimulates the economy because any stimulation the spending might represent is more than offset by the stimulation destroyed when the money is taken from the taxpayers.

But we don’t have a balanced budget, and we are running deficits that total in the trillions, so the situation is actually worse. The money being spent on Medicare isn’t our money, necessarily, because most of our tax dollars have been spent. The money being spent on Medicare is the next generation’s. Meaning not only is this spending not stimulating the economy, by spending it we’re robbing from our children’s future prosperity.

Rob Port

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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