Why Obamacare's Medicaid Expansion Proves Alexander Tytler’s Warning About Democracy

There simply isn’t any incentive for a politician in elected office TODAY to suffer for a train wreck that won’t happen until that politician is retired or dead.

Scottish historian Alexander Tytler is credited with making this profound observation about democracy in the late 1700s:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.

We now call this Tytler’s Cycle of Democracy. For this article, I want to focus on the second and third sentences regarding voters realizing they can vote for themselves more benefits from the public treasury, with elected officials promising more, if elected. Tytler wasn’t entirely correct that the “more” candidates always win, but he was remarkably spot on about voters figuring out how to “increase the dole!”

Tytler’s observation applies with full force to the Medicaid program, especially the expanded Medicaid program under Obamacare. Medicaid represents the apex example on why the Left ultimately always wins in the end in its zealous pursuit of big government. Simply: they promise more knowing that the Right won’t be able to reverse what they’ve given without electoral pain (i.e., losses). We are seeing this reality play out in real time right now.

Republicans in Congress are trying to put together a “big, beautiful budget bill” for Donald Trump to sign. Republicans know that deficit spending over the last eight years has put America in a financial hole. To make Trump’s 2017 tax cuts permanent and provide additional tax cuts, Republicans want to reform aspects of the Medicaid program to help control federal spending and, rightfully, ensure the Medicaid program has funds for the original intended recipients of Medicaid—namely, the poor, single mothers, and children.

The genius of Obamacare was to bribe states to expand Medicaid to 138% of the federal poverty rate with the promise that, unlike the normal Medicaid federal rate that typically paid less than 75% of spending, the federal government would pay for 90% of costs for the expanded program. A majority of states jumped at the “free” money by expanding Medicaid to healthy, adult working men. Ohio under John Kasich rammed through the expansion via Controlling Board shenanigans. As expected, employers stopped offering health care to employees they knew would qualify for expanded Medicaid. Why should they provide health care if the federal government wanted to do so? The costs of this expansion is crushing Medicaid so that it is headed towards being a $1 trillion program. Medicaid now swallows half the General Revenue Fund budget in Ohio and Medicaid enrollment remains roughly 700,000 higher than what it was pre-expansion. Kasich said only 275,000 would be added to the roles.

The concern is that funding for the original Medicaid population (poor, single moms, and kids) is being cannibalized to fund the expansion population (healthy, single working men). Democrats are using any reforms to the Medicaid program to claim that Republicans are cutting health care for the poor. The proposed reforms include low-hanging fruit like requiring work or community service in exchange for Medicaid to tougher reforms like reducing the federal funding rate to match the normal Medicaid rate. The latter reform would require states to pick up the difference. The budget legislation pushed out of committee only included the low-hanging fruit reforms, which won’t do much to solve the longer term financial issues of Medicaid post-Obamacare expansion. Republicans just don’t have the political courage to repeal Medicaid expansion entirely so that the program again serves those who truly need it. In fact, in Ohio, the Republicans expanded Medicaid because the money was “free” and continued to push and expand it failing to understand nothing is ever “free."

This is where Tytler comes in. America is spending itself into fiscal ruin largely because the federal government spends so much money on entitlements to the elderly (Medicare and Social Security), the poor (Medicaid and other welfare programs), and now the interest on the national debt incurred due to entitlements. As the chart above shows, 73% of federal spending goes to those three categories. Our national defense and support for veterans of that defense only totals 18% of federal spending. In 2024, 27% of federal spending came from deficit spending (i.e., borrowing the funds) that added to the national debt, which currently stands at nearly $37 trillion. The vicious cycle we find ourselves in comes from needing to cut federal spending to rein in the national debt, but being unable to do so because the Left and its Democrat politicians WANT more dependency on government to keep them in office under the banner of “bread and circuses;” whereas the Right and its Republican politicians are too afraid to cut entitlement programs to reduce dependency because they fear massive losses at the ballot box.

...the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy…from apathy to dependence; From dependence back into bondage.

Everyone sees the fiscal train wreck coming down the rails, but no political party wants to be the one to stop it because the only elected officials who HAVE TO SUFFER from the train wreck are the ones in their seats when the train wreck happens. There simply isn’t any incentive for a politician in elected office TODAY to suffer for a train wreck that won’t happen until that politician is retired or dead. As a result, America gets closer to the fiscal cliff that will be its ruin. Just as Tytler predicted.

P.S. WalletHub analyzed 182 U.S. cities to determine the best and worst cities to launch a career. As usual, Ohio did not do great, with only one city in the top 50. Here are the rankings of Ohio cities that made the list:

• Cincinnati #27

• Columbus #75

• Cleveland #87

• Akron #121

• Toledo #174

P.P.S. Based on polling, as I expected, a majority of Americans believe America was at its greatest point in the 1980s. As a child born in 1971 who spent his teen years in the 1980s, I couldn’t agree more. The best music comes from the 1980s. Ronald Reagan dominated the world in the 1980s. The best movies were made in the 1980s. Kids could be kids and roam free in the 1980s. And then there was Dungeons & Dragons. Enough said.