I mentioned yesterday that the new health care benefit program will probably never happen because the government is bankrupt. But the tax and regulatory features of the law will definitely go into effect. The results will not be pretty, as this article in the Wall Street Journal shows.
And does anybody else feel that it’s time for the Obama Administration to stop scolding people in the private sector who say things they don’t like?
Note this title from an article in the SF Chronicle: “National debt seen heading for crisis level.” So someone has noticed? Let me repeat what I said in National Review Online: there will never be a health care benefit because the President and the Congressonal leadership have spent all the money. True, even they can’t tell you what they spent it on; certainly not on defense, or transportation infrastructure, or stockpiling vaccines in case of a terrorist attack using bioweapons, or even on their own top priority, which was health care. But it’s gone.
The federal government doesn’t have to balance its budget, but that doesn’t mean there is no limit to what it can spend. The limit is what it can borrow at low interest rates. It is reaching that limit, and certainly will have reached it long before the planned implementation date of the “historic” health care benefit, which will turn out not to have been a “big bang” as the article says, but a dud.
Remember two things as you read the article. First, the numbers which the article uses are the Administration’s own projections. The actual situation will certainly be even worse than that. Second, none of the projected deficits include the cost of the health care bill, which was supposedly “paid for”.
We will be producing more on the deficit throughout April.
Boeing adds to the growing list of companies that have announced charges caused by ObamaCare.
Sen. Talent’s OpEd on the government’s mad-cap approach to spending was recently published by National Review Online.
The Heritage Foundation is beginning a series called “side effects” which will discuss the consequences of the health care bill. Here is the first addition.
It’s a reminder that what happens in government matters to real people facing real issues. The employees of AT&T are going to have lower quality health care because of the bill.
Heritage Foundation, AFEF Host Online Forum on Health Care Legislation
Policy experts answer questions and discuss next steps on controversial bill
(St. Louis) – A sweeping overhaul of the health care industry will soon be signed by the President, but this is by no means the end of the debate on health care reform. True reform empowers people, not the government. Former Sen. Jim Talent and Ambassador Ann Wagner, Honorary Co-Chairs of American Freedom and Enterprise Foundation, will be joined by Dr. Robert Moffit , the premier health policy expert at the Heritage Foundation, for an online town hall on Wednesday, March 24, 2010, at 11:00 CST via www.FreedomSolutions.org.
Who: Jim Talent, Ann Wagner
Co-Chairs American Freedom and Enterprise Foundation
Dr. Robert Moffit
Heath Policy Expert, Heritage Foundation
What: Health Care Online Forum
When: Wednesday, March 24, 2010 at 11:00 CST
Where: www.FreedomSolutions.org
The whole health care debate is moving further and further away from reality.
Yesterday the Moody’s rating agency announced that, to preserve the government’s AAA rating on its debt, the United States needs to make deep spending cuts, or, as Moody’s put it “fiscal adjustments of a magnitude that, in some cases, will test social cohesion.” Losing the triple A rating will substantially increase the cost of further borrowing and the interest payments the government will have to pay, which will in turn worsen the debt picture, which will cause the rating to go down further, which will raise the cost of borrowing further, etc.
It’s the death spiral for the federal budget.
So it doesn’t really matter how Congress votes. There will be no health care legislation because there is no money left. Budget cuts are coming, by compulsion if necessary. The creditors of the United States, not the government, will be in control of fiscal policy. But the Administration and Congressional leaders are proceeding as if reality isn’t happening. I honestly don’t know what words or messages can penetrate their state of denial.
Yesterday the President was in Missouri talking health care. But he’s not addressing the underlying concerns that are driving public opinion and causing a number of Democrats in the House to be opposed.
The author of this article in the American Spectator makes the same points Dr. Willey raises in his “Un-Reform” series. He was dealing with his elderly mother, who fell ill shortly after the new year. His conclusion: “I do not believe that we need another way to pay for health care in this country, but we do need a better way to deliver and utilize it.”
That is the message that Washington fails to understand – we don’t need a national health care program, or as some have dubbed it “Obamacare.” We need changes that embrace the good aspects of American health care, and reform the pieces that don’t work well. Dr. Bob Moffit of the Heritage Foundation and I recently held a online town hall to discuss free market solutions to health care challenges. We proposed many alternatives to “Obamacare” including association health plans, an initiative I pushed in both the House and Senate that was filibustered by many of the same people who say there aren’t other proposals…
Reports from Washington are that the health care bill will not tax the “cadillac” health care plans, or at least not all of them, and will instead tax payroll and perhaps apply the payroll tax to dividends and capitol gains. Some questions:
1. Suppose the bill does end up taxing those who have chosen to buy more expensive health care coverage. If the government taxes those plans, fewer people and businesses will choose them. The fewer such plans, the less revenue the government will collect from the tax, and the greater the deficit created by the health care bill. Those who continue to buy such plans will be predominantly those who really need more insurance. So the tax will produce less revenue than projected and get it primarily from sicker people.
2. A few weeks ago the President suggested cutting or ending the capital gains tax for small business to encourage job creation. That was a good idea. Why? Because jobs come from business expansion, business expansion requires investment, and people will make investments more readily if they can keep more of their profits — when they do make a profit. If the Administration now increases capital gains taxes, it is, on its own economic theory, killing jobs.
It’s another example of a leadership at war with the economy — and itself.
