March 25, 2015

How biased is the North Carolina news media? Very.

Just examine the coverage of two recent studies on Medicaid expansion in North Carolina under ObamaCare.

In December, Cone Health, one of the allegedly non profit hospitals that want taxpayers to pay them for the charity care they are supposed to provide in exchange for all the tax breaks they get from their non profit status, sponsored a study that said Medicaid expansion would create 43,000 new jobs in the state.

A review of the Newslibrary, a database of newspaper stories, finds over 40 newspaper articles touting the study since it came out in December. Typical was the homage paid by Doug Clark of the News and Record. (News & Record)

The media is still using the study to advance Medicaid expansion. (WTVD)

The Carolina Partnership for Reform is one of the few places you can read anything questioning the validity of that study supporting Medicaid expansion. We cited evidence from the Rand Corporation, the Obama stimulus and Medicaid expansion in Utah that shows higher government spending is associated with a shrinking private sector economy, a lower income growth and fewer jobs.

CPR Blog: If you liked the stimulus you’ll love medicaid expansion

CPR Blog: Medicaid expansion shrinks private sector

Of course, those oh so fair minded editors like Doug Clark never picked up on any of the facts we laid out opposing Medicaid expansion. And now an economic study from State Budget Solutions presents numbers on how much expanding ObamaCare’s Medicaid option will shrink North Carolina’s private sector economy.

They say the higher taxes or increased borrowing to pay for expanding Medicaid will lower personal income by $1600 or cost the private sector 120,000 jobs as money is transferred to the government sector at the expense of the private sector.

Here is the heart of the State Budget Solutions study you can read for yourself. “Only the private sector can generate new income and wealth in an economy. This runs contrary to the so-called Keynesian multiplier analysis that ignores this basic economic principle. Government spending is the redistribution of income first extracted by taxes. Yet, the very process of redistribution comes at a very high economic cost. Prominent Harvard economist Martin Feldstein states:

“The appropriate size and role of government depend on the deadweight burden caused by incremental transfers of funds from the private sector. The magnitude of that burden depends on the increases in tax rates required to raise incremental revenue and on the deadweight loss that results from higher tax rates… recent econometric work implies that the deadweight burden caused by incremental taxation (the marginal excess burden) may exceed one dollar per one dollar of revenue raised, making the cost of incremental government spending more than two dollars for each dollar of government spending.” [emphasis added][1]

Though the exact numbers may vary, there is a cost to Obamacare’s expansion of Medicaid that will have to be covered by someone. This will likely come in the form of higher taxes and/or borrowing at the federal level. This will leave less money in the pockets of North Carolina’s residents and businesses, and therefore reduce their ability to invest for the future.

This is even more concerning coupled with the projected growth of the federal budget deficit over the next decade: an expected 114 percent increase —from $486 billion in 2015 to $1,038 billion in 2025. This growing deficit is unsustainable given that in 2025 the interest payment on the national debt ($808 billion) is projected to equal three-fourths of the budget deficit ($1.038 trillion). Simply put, this means that the federal government is essentially borrowing just to pay the interest on the debt!”[2]

As far as we can tell, the State Budget Solutions study ignores another important fact. Medicaid expansion under ObamaCare is about giving a new welfare entitlement of free health insurance to single, childless, able bodied adults who don’t work. Expanding entitlements to able bodied people creates an incentive to work less to get higher benefits. That is a drag on the economy all by itself.

So far, we haven’t seen anything in the news media about this new study showing Medicaid expansion will hurt the economy.

Will the so called fair minded editors present the evidence against Medicaid expansion? Don’t hold your breath folks.

For the most part, the media’s slant is about bigger government doing more things for more people. Conservatives are about providing more opportunity for more people to prosper and do more for themselves.

If you want to see the conservative side get a hearing, support the Carolina Partnership for Reform.