This is a time when the population of America should be throwing rose petals at the feet of the Great Leader, Miracle Worker, Economist, Ph.D and Professor of Constitutional history, Dr. Barack H. Obama, MD.
All of our problems should be solved now.
Two years ago we were told and sold that Obamacare, the keystone legislative effort of Obama’s first two years, would solve our problems when it comes to out-of-control government spending.
It’s a deficit reducer, Washington Post wonk Ezra Klein told us about the government takeout of healthcare under the banner of “reform.”
Just pass Obamacare and we’ll find out how good it is, said Nancy Pelosi, which proved in the end to be a kind of a epitaph for her Speakership of the House.
Imagine how upsetting it might be now, two years later, to discover that the White House thinks that government spending isn’t out control, but that, “to be clear,” as the president himself might say, we have a HUGE problem with healthcare spending. Of all things.
Um, Obamacare? Anyone? Helllloooo?
“I think every economist worth this -- whose insights into this area are worth the paper on which his or her Ph.D. is printed,” said White House Press Jester Jay Carney recently “would tell you that the principal driver when it comes to spending of our deficits and debt is health care spending. And that's just a fact.”
Oh, it’s facts they want?
OK, well here are a few more facts:
If we just keep pace with spending as it stands now, and don’t add any extra measures, the CBO predicts that interest rates will double in the next four years to over 5 percent for the ten-year Treasury Notes. That means that interest on our national debt will approach $1 trillion annually, making interest on the national debt the fastest growing portion of the federal budget.
Now that’s just a fact.
By 2017 interest could be the third largest line item in the federal government.
And Obamacare, far from solving the spending crunch, will accelerate it.
“Spending for major health care programs will be nearly 5 percent of GDP in 2013,” says the Congressional Budget Office [CBO] “and such spending is projected to grow rapidly when provisions of the Affordable Care Act are fully implemented by mid-decade, reaching 6.2 percent of GDP in 2023.”
That means that that 12 percent of our GDP will be dedicated to federal government payments servicing debt and healthcare by 2023 assuming the sunshine and roses predictions of the CBO on GDP growth after 2013.
There is reason to doubt those assumptions.
Already Obamacare, which was scored by the CBO as a deficit-reducing program, has seen private insurance rates skyrocket. The Kaiser Family Health Foundation has found private healthcare insurance premiums have risen over 24 percent in 2012.
Even employer-sponsored plans aren’t immune from inflation. It turns out that when the federal government tells insurance companies that they must cover certain conditions, insurance companies need money to cover costs. In turn, that means they must raise rates.
Only career government types wouldn’t think of that- or better yet ignore it.
“As we wrote in October,” says D’Angelo Gore, of FactCheck.org, “the new law has caused about a 1 percent to 3 percent increase in health insurance premiums for employer-sponsored family plans because of requirements for increased benefits. Last year’s premium increases cast even more doubt on another promise the president has made — that the health care law would ‘lower premiums by up to $2,500 for a typical family per year.’”
Just a few short years after passage of the most ambitious social welfare program ever, Congress, the public, economists and even supporters were dissatisfied.
There were questions about benefits; there were question about affordability; there were question of whether the plan was going to benefit anyone but the federal government.
That program of course was Social Security, which was billed as an insurance scheme as well.
“Since then its purchasers, the nation's taxpayers, have had occasion to read their policy carefully,” wrote Time Magazine in February of 1939, “and, if they have detected no outright jokers, their reaction has been such that practically every politician in the U. S. from Franklin Roosevelt down has put revision of Social Security at the top of his must list.”
Standby now for similar problems with Obamacare, because the law that was supposed to help control healthcare costs won’t do it and even the mainstream media, the White House and maybe –gasp- Ezra Klein are alive to this fact.
“But will they slow down Medicare spending enough to make a dent in the tidal wave of spending as baby boomers retire?” ask Josh Gerstein and Darren Samuelsohn of Politico in their fact check on the State of the Union. “Too soon to know — and the doubters aren’t all in the far right wing of the Republican party.”
But the doubters, like me, are there too. We've just been there longer.
Today, at 11:20 AM PT: Get the Market Movements in Advance: William's Edge Webinar for October 31st, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for October 29th, 2014 | John Ransom