The Times reports that Medicaid added 3.7 million Americans in 2009, it’s largest single year increase ever. 1 in 6 Americans now participate in the program. The stimulus money helped the states bear some of this burden, but as it expires, this program will likely serve as dis-stimulus as states cut other areas of their budget to compensate.
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The states (and counties and cities) are not monetarily sovereign. The federal government is.
Over time, non-monetarily sovereign governments cannot self-support, even with frugality and tax increases. Because of inflation, simple mathematics dictates that non-monetarily sovereign governments need money coming in from outside, whether from exports or, in the case of the states, from the federal government.
Today, the majority of states struggle with budget deficits, not only because of inefficiency and graft, but also because they do not receive enough money from the federal government, which should pay for, among other things, Medicaid.
Rodger Malcolm Mitchell