Health Care

The immorality of ‘free’ federal money

February 18, 2020

Trent England

Oklahoma must expand welfare in order to get more federal dollars—this a common argument for the Obamacare Medicaid expansion. It makes sense, unless you have all the facts. The truth is that this money is not sitting around somewhere in Washington, nor is it currently going to other states. Any additional federal dollars will be borrowed in a way that is both undemocratic and immoral. 

Imagine: Someone takes out a home loan, then sells the house without the new buyer knowing it’s collateral. The seller spends the money and the new owner discovers that unless she makes the loan payments, the house will be repossessed. This, of course, is fraud and, effectively, theft.

To the seller, however, it’s a great deal. He gets the borrowed money and can spend it now. Someone else pays later. This is how federal deficit spending works. Today’s politicians spend the money, tomorrow’s taxpayers foot the bill. In modern times, federal politicians have cut state politicians in on this deal.

Government deficits are taxation without representation. This violates basic principles of democratic government and legitimate taxation. Just like Oklahoma voters don’t set tax policy for Arkansas, voters today should not set tax policy for voters 20 or 30 years from now.

Last year’s federal deficit was more than $960,000,000,000. This year’s deficit will be more. And it will be even more than that if Oklahoma expands Medicaid.

Government borrowing might make sense in an emergency, or to pay for a fixed asset that will last for future generations. But government borrowing from the future to pay for operational expenses today is irresponsible and immoral. 

In Oklahoma, government borrowing is restricted by the state Constitution and generally requires a vote of the people. The courts have yet to apply this provision to federal funds, but politicians could still abide by the spirit of our state law rather than grasping for easy money.