Krugman: Beggar Thy (American) Neighbor
By David Henderson
Either that, or Paul Krugman believes in the Easter Bunny.
In his June 6 New York Times column, “The Spite Club,” Paul Krugman castigates some Republican governors for refusing to extend Medicaid to a larger population. He writes:
No, the only way to understand the refusal to expand Medicaid is as an act of sheer spite.
Did you get that? That’s the only way to understand the refusal. The governors couldn’t be worried, for example, that the federal subsidy will end or diminish at some future point and then the state governments will be stuck paying a higher fraction of the costs.
But put that worry aside. Let’s say Krugman is right and that there’s no reason to worry. Here’s Krugman’s other reasoning:
A new study from the RAND Corporation, a nonpartisan research institution, examines the consequences if 14 states whose governors have declared their opposition to Medicaid expansion do, in fact, reject the expansion. The result, the study concluded, would be a huge financial hit: the rejectionist states would lose more than $8 billion a year in federal aid, and would also find themselves on the hook for roughly $1 billion more to cover the losses hospitals incur when treating the uninsured.
In other words, if the 14 states reject the Medicaid expansion, they will be out $8 billion in federal subsidies. In Krugman’s mind those subsidies seem to be costless. Does he believe in the Easter Bunny too? I’m sure he doesn’t. So what is he really saying? Not that the subsidies are costless but that those costs are borne by Americans in general, not just the Americans in those 14 states. Krugman is saying, in effect, that the 14 Republican governors should screw the rest of the country by taking the subsidies. Beggar thy neighbor.