California politicians love to brag. GDP near $4 trillion. “Fourth-largest economy in the world.” Progressive pundits cite those numbers as proof that big government works.
But behind the glossy stats sits a system bloated with grift, distortion, and federal abuse. Nowhere does that dysfunction show more clearly than in California’s shell game with Medicaid reimbursements — a sleight of hand known as intergovernmental transfers, or IGTs.
Any private-sector CEO who ran a company like this would face prosecution. In Sacramento, these people get re-elected.
At first glance, IGTs look benign. Counties, fire districts, and public ambulance providers send money to California’s Medicaid program, Medi-Cal. The state then uses those funds to draw matching federal dollars.
In theory, it’s a cost-sharing mechanism to support care for low-income patients.
In practice, California
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