Posted by Mark Moore at Arkansas Watch, Tuesday, January 15, 2013
The normalcy bias, or normality bias, refers to a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This often results in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of governments to include the populace in its disaster preparations. The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur.
Here, the bias is that the Federal Government is going to make good on its promises to pay for 90% of the costs of Medicaid expansion in perpetuity. That is the paradigm the ruling class in this state has been used to operating under for the past 40 years or so. If you need money, you get it from the federal government.
The world has changed since then. Washington cannot keep its new promises. It is no longer able to even keep its past promises. We are somewhere between point four and point five on the diagram above. All of the low-hanging fruit of high returns on government “investments” in the economy have long since been harvested. We are now at the point where increased government intervention does not produce proportional economic growth, but rather the debt created to fund the intervention creates a drag on the economy, even at (artificial) near-zero interest rates.
FEDGOV is borrowing almost half of every dollar it spends now. Yet many in our state government and media completely discount the possibility that D.C. will not keep its promise to pay almost all of these new bills forever. That is madness. Any fair look at what is going on with the sustainability of Washington’s spending will conclude that it is not sustainable. Why then, is anyone contemplating partnering with Washington in an expensive new program?
The numbers that Beebe’s Budget office are putting out about the “cost savings” to Arkansas four, five, six years down the line, are complete garbage. Not the calculations mind you, but the assumptions. They assume Washington will be “good for it” five years from now. They can’t know that. They can’t rationally assume that the risk of FEDGOV being unable/unwilling to fulfill its promises is zero. In truth putting the odds of that risk at one hundred percent is much more reasonable than the zero percent risk assumption they use.
Some leaders are slowly moving to acceptance of this reality. Others are trying to keep one foot in the real world and the other foot in the delusion of what once was. Arizona Governor Jan Brewer falls into this group with her alluring fantasy of a “trip wire” provision. That is, expand Medicaid but say you will un-expanded it should FEDGOV renege on its funding promises in out-years. The genie does not go back into the bottle. The toothpaste cannot be crammed back into the tube. And there is no easy way, maybe no possible way short of fiscal collapse, to undo this expansion once it is done, either politically or legally. Medicaid is formally a state program that FEDGOV chooses to help fund, and it is the state that will be left holding the bag.
Another version of knowing but not facing current fiscal reality is the suggestion that we know that FEDGOV is going to renege but let’s integrate further with them so that poor people will get a few years health care before the break down. I call this concept, deliberately integrating your state healthcare infrastructure into a system you know is unsustainable, the “Maximum Stupid Plan.”
Advocates of the Maximum Stupid Plan don’t seem to get that our existing health care structure for the poor, clinics, private charity, non-licensed practitioners and those who will retire rather than be forced to work for the government for slave wages, will be disrupted by the new system. However inadequate people think this care network is, it will be worse once it gets replaced by the expanded Medicaid system. The current care system such people are using will mostly go away, and then be replaced by something that will break down in a few years.
I call it the Maximum Stupid Plan based on the intelligence level commiserate with deliberately altering your health care infrastructure to integrate into a system whose funding is obviously unsustainable, but based on its probable outcome I should call it the “Pile Up the Corpses Plan.” Perhaps the door steps of the media figures and politicians who advocate this plan would be a good place to stack said corpses until they can get a decent burial.
We can’t count on that funding five years out. We could have a fiscal crisis five months from now. That’s just how strung out the dollar is. Any state government or media leaders that are not so deluded by normalcy bias that they can’t see the iceberg sitting right in front of our Titanic should know that we need to find ways to function where we are less dependent on D.C., not more.