Radical Right Makes Business and Government Inefficient

The Post-Crescent Highlists Business's Dependence on Investment in Infrastructure

Post-Crescent on July 5, 2013 featured an article about an effort by Congressmen Petri and Ribble to preserve the current weight limits for trucks on U. S. Highway 41 when it is converted to Interstate 41. Today, trucks weighing up to 97,000 lbs. can use Highway 41, but the rules for interstate highways place a limit of 80,000 lbs. on trucks. Mr. Ribble and Mr. Petri are campaigning to grandfather in the old weight limit when the highway becomes an interstate.

Radical Rightist Republicans Are Wrong to Want to Minimize Government Investment

The advantages and disadvantages of the congressmen’s proposal are obvious, and I will not argue one side or the other. What I will point out is that the whole discussion highlights business’s dependence on government’s investment in infrastructure. Radical rightists in the Republican Party like to say that government spending is mostly wasted and that it should be minimized in order to make the money available for private investment. They say that government investment “crowds out” private investment because every dollar invested by government is a dollar that is not available for private investment, but the example of Highway 41 shows that government investment in infrastructure can actually promote private investment. The Post-Crescent quotes the manager of the conversion project as saying,

What it means for the state of Wisconsin is the opportunities for increased economic development along the corridor …. There’s some national operations that won’t consider locating on a highway if it’s not an interstate.

Government Investment and Business Investment Are Complementary

Government investment and business investment are not in competition with one another. They complement one another. Without private investment to develop the economy, government could not operate because the private economy generates the taxes that government needs. On the other hand, without government investment in infrastructure, business could not operate because businesses depend on the infrastructure to get their products to market and to obtain their inventories of raw materials and finished goods.  Modern businesses also need government investment in other areas. For example, they need an educated work force. So, they depend on government investments in education. Law-enforcement and fire protection are other examples.

Radical Rightists Create Inefficiency in Government

Because of the interdependence between business and government, we all want both of them to do their jobs efficiently, but unfortunately, the radical rightists in the Republican Party are making both of them less efficient than they should be.  The radical rightists insist that government investment should be minimized. They oppose practically all proposals for public investment, and their opposition has become a drag on the efficient operation of governments at all levels. Because of Republican opposition, useful investments of many kinds of slowed down and even stopped. Republican intransigence creates uncertainty in funding, and as a result, our governments are much less efficient than they might be.  Many important investments in infrastructure, education and other areas are not made, and our economy suffers as a result.

Radical Rightists Create Inefficiency in Business, Too

The uncertainty created by the radical rightist also reduces the efficiency of businesses. They delay making investments because in a climate of uncertainty, it is hard to know what the costs and benefits of an investment will be. Large companies are sitting on huge piles of cash that could be invested to grow their profits, to create jobs and to grow our economy, but the uncertainty created by the intransigence of the radical is preventing them from making such investments.

We Must Distinguish Between Investment and Other Spending

We need to find a way to bypass the intransigence of the radical right. To do so, we need to do two things. First, in our public discussions, we need to distinguish between “investments” and other spending. An investment is an expenditure that is expected to bring a return that is greater than its cost.  Expenditures in areas like transportation infrastructure and education are investments. They stimulate the economy by improving transportation or by improving the work force.  That does not mean that every investment turns out well. Some investments will fail to produce the expected results. This is true for business investment just as it is for government investment. Businesses sometimes make investments that don’t pan out, and so do governments. Investments are inherently risky because we cannot really know the future, but we have to exercise our best judgment, and we have to take the risks that investments bring in both the private and the public sectors. Cutting back on public investment in order to minimize the size of governments is a recipe for economic decline.

We Must Defeat the Radical Rightists at the Polls

The second thing we need to do in order to bypass the intransigence of the radical rightists is to defeat them at the polls.  If you are a Republican, work to elect moderate Republicans to office. If you are a Democrat, work to elect Democrats to office. Until we do these things, the radical rightists in the Republican Party will continue to create fiscal uncertainty and will continue to make both our governments and our businesses less effective and less efficient than they should be.

The Refusal to Expand Badgercare is Bad for Wisconsin's Economy

Refusal to Expand Badgercare is in the Budget

One of the provisions of the budget that was recently signed by Governor Walker is the refusal to expand Badgercare (our Medicaid program) as a part of the implementation of The Affordable Care Act (Obamacare). Under the Affordable Care Act, most people will be required to have health insurance.  Some of those who cannot afford health insurance will receive assistance in paying for it, but many people are too poor to pay for health insurance even with help, and the expansion of Badgercare was intended to provide insurance for them.  Federal dollars are available for those states that decide to expand their Medicaid programs.

174,000 People To Be Denied Assistance

Governor Walker and his radical rightist colleagues in the legislature decided to refuse to expand Badgercare, and in an extremely cynical move, actually reduced the number of people who are currently eligible for Badgercare with the excuse that they will now be able to buy their own insurance through the health insurance exchange created by The Affordable Care Act. It is estimated that because of the refusal to expand Badgercare, 174,000 people will be denied the health insurance that they would have been entitled to under the Affordable Care Act. This includes 98,000 people who are now enrolled in Badgercare who will be kicked out of the program under the newly narrowed guidelines. Kicking these people out of Badgercare is cynical, cruel and completely contrary to the values of most people in Wisconsin, but that is not all. 

Our Economy is Harmed in Several Ways

The refusal to expand Badgercare harms our economy in several other ways.

1.       It increases the total cost of healthcare in Wisconsin by promoting the excessive use of emergency rooms. Many of the people who are unable to enroll in Badgercare will be too poor to afford insurance. They will be uninsured, and when they need care, they will go to hospital emergency rooms, which are required to care for them. Emergency room care is the most expensive kind of care. So, the fact that the uninsured have nowhere else to turn increases the total cost of healthcare.

2.       The state government’s expenditure for health care will increase because the budget includes money to compensate the hospitals for caring for the uninsured in emergency rooms. Refusing to expand Badgercare does not even save money for our state government. It will make our deficit worse as is shown by the $500 million structural deficit in the current budget.

3.       Our health insurance premiums will rise. Inevitably, the state’s reimbursement of the hospitals will not cover the whole cost of care for the uninsured. The hospitals will recoup their cost by increasing the charges to the rest of us. Our health insurance companies will pass the cost on to us in the form of increased premiums.

4.       Thousands of jobs will be lost. The expansion of Badgercare would have increased the demand for health care, and that would have created thousands of jobs in Wisconsin. Many of those jobs would have been here in the Fox Cities because our hospitals are regional medical centers. Those jobs would in turn have boosted the economy of our community by creating demand for all sorts of consumer goods here in the Fox Cities.

5.       Our tax money will be sent to other states instead of being returned to us. The money that would have been sent to Wisconsin to help with the cost of the expansion of Badgercare will come from the income taxes that we pay. Now it will be sent to other states instead of being used to benefit us. The amount we will lose is big. It is estimated at approximately $12 billion over ten years.

The Refusal to Expand Badgercare is Contrary to Wisconsin's Values

Thus, the refusal to expand Badgercare not only harms thousands of people unnecessarily. It also increases the state’s deficit, increases the total cost of health are, increases our health insurance premiums, harms our economy by eliminating thousands of jobs and sends our tax money to other states. This is not consistent with our values. Most people in Wisconsin believe in caring for their neighbors, not abandoning them. Most people in Wisconsin believe that we should reduce the cost of state government, not increase it.  Most people in Wisconsin believe that our health insurance premiums are already too high, and that we should avoid increasing them if we can. Most people in Wisconsin believe that we should create jobs, not eliminate them. And most people in Wisconsin believe that we should get our fair share of the benefits from the taxes we pay, not send them to other states.

Is This a Pay-off to Big Special Interests Outside of Wisconsin?

We should ask ourselves why Governor Walker and the other radical rightists in Madison would do something so obviously contrary to the values and wishes of the voters of our state. We cannot know for sure, but in cases of this kind, it is not a bad idea to follow the money. Governor Walker has received millions of dollars in campaign support from radical rightist individuals and organizations outside of Wisconsin, and those organizations expect something in return. Perhaps Governor Walker acted against the interests and desires of the people of Wisconsin as a payoff to the large, special interests that have supported him so generously.