What better way to make someone a friend than to give them something? And what better position to be in when giving out gifts than to pass the costs onto someone else?
This is the position of politicians in America: they give goodies to voters who will decide whether or not they’re returned to office, and then pass the cost of those gifts to later generations of voters and taxpayers. It’s a win-win, but not in the commonly understood way: Voters who want free stuff win, and politicians who want to be re-elected win. It’s a bad way to do business as far as the economy is concerned, but in the short term it feels good. Except to taxpayers still unborn.
Our own governor is a good example. The first Republican governor to depend on Obamacare in order to grow his state’s Medicaid, his approach has been “bring more!” Medicaid in Nevada consumes 17 percent of the state budget (more than education) after a budget increase over the previous biennium of 22.8 percent. Those are astounding numbers. To increase the budget by nearly one-quarter over one session with no plan to cover increased costs is irresponsible. It’s also dishonest to voters, because such a budget increase is untenable — if the feds don’t pick up the shortfall, it will either have to be ratcheted back at some point in the future, or a massive tax increase will be needed to cover the state’s obligations.
Perhaps Gov. Sandoval thinks Nevada will receive a large revenue increase from the new tax on marijuana sales. Several commenters in this paper’s opinion pages think the governor rushed support for marijuana legalization because he anticipates just such a windfall. My concern is that much of the state revenue from marijuana will go to administering production, distribution, and sales. And remember, there’s a limit to the level of taxation that can be imposed: Beyond a certain point, black market sales will compete with the new legal market.
Other policy decisions the governor has made, such as giving tax incentives to Tesla and Faraday Future, are already beginning to fray around the edges as Faraday Future is apparently re-examining their plans for financial reasons. The good news is, after learning of Tesla’s decision, more employers are moving to Nevada and will bring jobs with them. The bad news is, they too will expect tax incentives.
Our governor’s fondness for Medicaid moved him front and center into the legislative battle currently going on in Washington as the Senate tries to repeal Obamacare. At the recent National Governors Association meeting in Providence, R.I., elected officials tried to learn if he would support repeal of Obamacare. Continuation of that program means continuing money for Medicaid, so the Governor will certainly not support repeal of that seven year old federal money spigot. But he refused to answer their questions.
Former Vice-President Joe Biden penned an op-ed in the Washington Post over the weekend declaring health care is a right. He said it’s “unsustainable” for people to delay healthcare because of cost. This plays into the idea of expanding federal control of the health care system, because only the feds can print money, turning growing health care costs into inflation and telling you you’re getting a gift.
But ultimately, health care costs can’t continue on their present trajectory at the state or federal level. The so-called “entitlements” portion of the government budget is growing faster than any other, and that, Mr. Biden, is what is truly unsustainable. Of course any program that offers free goodies will keep growing. Until it can’t, but our current politicians will be gone by then.
Fred LaSor longs for a day when politicians do what is right, not what will buy them votes.
