Robert A. Heinlein, Civil Rights, Market Pressure, and Right-Libertarian "Freedom"

Recession in Oil Patch Red States This Year?

Over at Equitable Growth: In the Oil Patch, probably yes--lost demand from the failure to expand Medicaid is likely to push them over the edge and into recession. Elsewhere it will be close, but probably not:

Ezra Klein: The Anti-Obamacare Movement Is Making Red States Sicker and Poorer: "The strange strategy Republicans have adopted against [ObamaCare]...

...is leaving red states poorer and sicker.... King v. Burwell.... If the Supreme Court rules for the plaintiffs, those states, including Arizona, will lose their subsidies. That would be a disaster for those states. As Sarah Kliff writes: READ MOAR

Approximately 205,000 Arizonans are receiving coverage through the marketplace. Of those, 76 percent are receiving subsidies to help cover the cost of their premiums. An adverse ruling would likely lead the state's exchange to collapse, as healthy, young Arizonans who could only afford insurance because of the subsidies pull out and the exchange itself enters into a death spiral.

What Arizona has promised to do is let that happen... a decision made, of course, by legislators and a governor who have insurance now, and will have it in the event of an adverse Supreme Court ruling....

If the subsidies are ripped out of federal exchanges, it will only cripple the law in red states that loathe the legislation. Obamacare will work fine in states that want it to work; those states either have their own exchanges now or they'll quickly build them. But resistant red states will be left with a wrecked insurance market--and a hefty tax bill.... Republicans in those states will still be paying the taxes and bearing the spending cuts needed to fund Obamacare. They just won't be getting anything back. In effect, the Republican plan to destroy Obamacare has become a plan in which red states subsidize Obamacare in blue states....

More than 20 Republican-led states have rejected the Medicaid expansion. The result is about 5 million more Americans without insurance... [and] those states are forgoing about $37 billion in federal funds in 2016 alone.... Republicans warned that Obamacare would wreck health insurance markets, do little to help the uninsured, and leave everyone else paying hefty taxes to fund a rolling disaster. In fact, Obamacare has covered millions of people at a much lower cost than expected. But as a byproduct of their tactics against Obamacare, Republicans are making their predictions come true, at least for their own residents.

After accounting for the multiplier, the absence of the Medicaid expansion and other ObamaCare nullification efforts is putting a downward drag on economic growth in Red States of about 0.5% this year: a 2%-point growth in the non-insurance gap times 1/6 of the economy times a 1/2 insurance-spending attenuation factor times a Keynesian multiplier of 3:

Taking Stock Gains in Health Insurance Coverage under the ACA as of March 2015

Add to that the effect of the oil price declines like 1986 and 1998 on the oil patch:

Dallasfed org assets documents news speeches 15outlook phillips pdf

And I do not see how the Dallas Fed can still forecast:

This year Texas job growth likely to moderate to 2.0-2.5%, about 259,000 jobs--149,000 fewer than 2014--and close to US job growth...

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