ATLANTA— Nancy Pelosi has done it. Through arm-twisting and back-door dealing, this haughty queen of fiscal recklessness has produced a massive, 1,990 page bill whose overarching intent is to reduce the fictional number of “uninsured” Americans without regard to cost or consequence. My firm conviction remains that Barack Obama’s misguided and woeful health reform initiatives will die on the Senate floor, buried under the weight of intense voter outrage and the haunting specter of a 2010 election cycle blowback against Change America No Longer Believes In.
Nonetheless, I thought it would be interesting to posit my top 4 predictions should I be wrong and should this disastrous bill be passed.
Here they are:
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Democrats will suffer massive losses in the 2010 election cycle, both as a consequence of passing this bill and as a consequence of the anemic economic landscape their stimulus package will have failed to make better. One of the pillars of true-believing liberal dogma is that Democrats suffered massive losses in the 1994 election cycle because Bill Clinton failed to pass massive health care reform the previous year. The truth is much more ominous for the true-believers. The 1994 election cycle likely happened as it did precisely because Mr. Clinton tried to pass a reform bill most voters didn’t want. Sound familiar? My guess is that the double-whammy of ideological-overreach and a jobless recovery will lead to a rout for Democrats in 2010. My suspicion is that the Democrat leadership knows this but doesn’t care. Given their understanding of the ebb and flow of American politics, they calculate that it doesn’t matter- get the bill through regardless; send your pawns to die for the greater good.
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The issue of rising health care costs and spiking insurance premiums will not go away after this bill. In fact, this bill will stoke and exacerbate the problems. Sure the fictional number of uninsured will go down, but at what massive cost? The government’s currently precarious fiscal imbalances will only be amplified by this abomination. Much like the election of Barack Obama has proven so disappointing to so many millions (because the change he made them believe in has not occurred), so it will be with this health care monstrosity. For the first 3 to 5 years, the impacts will be imperceptible, such that most people may not even recognize what is happening. But somewhere towards the latter third of this upcoming decade, spiraling health care premiums, cumbersome taxes, and out of control government spending on the various subsidies and entitlements this plan creates will bring the health care debate rapidly back to the forefront. Democrats and progressives wager that by passing this bill and involving the government so heavily in all of our lives they will change American’s perceptions about government largesse, waste, and incompetence. My prediction is that the opposite will occur.
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By the mid 2020′s, we will be facing a growing problem wherein various forms of rationing will be made necessary by supply shortages in parts of the health care industry. The taxes, lowered reimbursement rates, and myriad regulations and bureaucratic red-tape will have driven many doctors into early retirement and frightened potential future doctors from entering the profession. As millions more Americans are funneled into government programs and as reimbursement rates are reduced to offset rising costs, more hospitals will either be shuttered or taken over partially or in whole by state and local governments. Many private health insurers will be bankrupted and consolidated, serving an ever smaller population of wealthy liberal and conservative elites, while the middle class is stuck with crappy insurance and waiting lists that grow ever longer for basic care. Overall American frustration with the system will reach a critical mass.
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Somewhere in the glorious future, Americans will come to their senses and politicians will recognize the impending fiscal ruin that the short-sited, partisan, ideological and uncaring Democrats of 2009 created for our country. By the year 2030 (at latest), America will begin the steady and necessary dismantling and privatization of the public insurance system in order to save costs, lower taxes, and reintroduce incentives to attract young professionals and entrepeneurs back into the healthcare market place. A new era of fiscal conservatism and economic expansion will be born and once again the middle class will start to enjoy the comforts that will be relegated to the wealthy under Nancy Pelosi’s plan.
My overarching prediction is that the conservative solutions offered today are the solutions of the future. Solutions of a much more practical and sensible political class, some years from now, when faith in government and central planning meet their Waterloo in the face of spiraling costs, taxes, inflation, government debt and health care supply shortages.
The term “progressive” is a funny one to apply to a narrow-minded, ideological, fringe political group which persistently offers twentieth century solutions to a twenty-first century problem.
But I guess the term “progressive” could be applied- depending on what you think they are helping us to progress towards…
TennesseePaul
Stephen VanNuys
Brooklyn Daniel
The Freedom Thinker
I think it would be early their 2030. I think it would actually not come to frution at all by being stopped before it starts (I’d read somewhere that the plan won’t physically get under way even if passed until 2014). With spending the way it’s going and no end to borrowing in site we’re head down a path of no return.
China talking of moving away from the dollar and dePEGing their currency, the EU moving away from the dollar, inflation and more America will have to change sooner rather then latter.
At some point I think the markets will vote no confidence in the U.S. causing a rout of the dollar. When this happens the government will only have ONE choice print more dollars causing a cycle to the bottom which is what they’re already doing. They won’t cut spending at first and they won’t be able to raise taxes much either. I think the dollar will lose 90% of it’s value within the next 4-5 years. Just listen to everybody the IMF, China, EU, etc., and etc. Even the CBO says we can’t keep doing what we’re doing. But nobody in government is listening AT ALL. Talk of continuing the $8000 home credit thing etc. They’re litterally destroying the wealth of this country by dramatic devaluation of the dollar. Even if we get 2010 and have conservative election results what are they going to do. How are they going to CUT trillions from the budget to even get it balanced? And when will it be balanced they’ll give some projection like by 2015 it will be balanced or earning a surplus or something like that. Meanwhile we’ll continue to spend more (read print more) while at the same time dollars begin to flood back in from overseas. Even if their isn’t some GIGANTIC move that causes it overnight it can happen somewhat slowly. Stock market returns 8%, bonds/treasuries return 6%, but inflation is 12% (or more) we’ll get poorer and poorer everyday. Meanwhile we get CPI adjusted wages (which don’t keep up with true inflation) if we’re lucky and the gap between the rich and poor widen further and further feeding fuel to wealth envy.
It’s just stupid for us to go down this path. But it’s the path we’re marching down anyways.
I share your concerns FT. But I don’t think these things fall so precipitously as you predict. The US dollar remains far too integral to the international financial system for people to abandon it so quickly. I really just don’t see a 4-5 year time horizon prior to its collapse. I could see us having a similar (or worse) crisis to what we just endured in the foreseeable future, b/c we have addressed the current crisis with all the same bad ideas that got us into it in the first place. Nonetheless, I would guess that if we went right back in, there would be a flight to US treasuries yet again.
One of the primary ways hyperinflation occurs when foreigners no longer buy your debt. I agree we are on a course that really increases that risk- but I think we are long way off from facing it. Japan services a debt that is 200 percent of GDP and growing. By the end of this decade, it could be 300 percent of GDP. They also have massive unfunded entitlements on top of that.
We are nowhere close to where they are. I don’t think we could do that, b/c we have such low savings right. But as disappointing as it may be, we can still go further down this path we are on all the same. Debt at 150 – 175 percent of GDP? Maybe. And so I believe our day of reckoning is likely within the next 20-25 years and not within the next 5. That day is coming though, and coming quickly.
We agree on the result just not the timing. I recognize the amount of debt that other countries services. However, as you point out hyperinflation occurs when foreigners no longer buy our debt and that we are on this path. It would take us 20+ years to get to a point where we can no longer service the debt. I don’t diagree there either. However, I doubt that China or any other country would hold our debt until we get to the point where our debt is unmanagable. Perhaps I’m wrong and China and the world will hold our debt right over the brink. If this is the case things will be MUCH worse then if they back out before we get to that point.
At some point (something the Chinese are already discussing) they begin dumping dollar reserves. And we’ve already seen other countries ceasing buying treasuries like Russia who have cut holdings from Feb. high of 138 billion down to 121 billion. Likewise China has cut from a high of 800 billion in May down to 797 billion. So in a sense we’re already begining to see this. If the commercial morgage backed securities market collapses and unemployement stays low (as you yourself pointed out recently) for a substantial time. The government is going to be put under pressure to intervene. The talk of extending the 8,000 new home credit is just a most recent example of this.
This isn’t just me saying this either. “When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s, but the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary,” says Warren Buffet. And he went on to warn of the “onslaught” of inflation. He is actively working on reducing his cash position from 25 billion down to 10 billion.
Perhaps, 5 years is to short a time frame however I still think 20 years is to long. Either way as you say the day is comming. I’m not sure of the definition of “hyperinflation”. But I would say we could have substantial inflation without any dramatic change in the geo-political market. Just a slow release of dollars and a scale back of Teasuries will push inflation up. And interest rates won’t rise quickly enough to keep up either because of the jobless nature of the recovery which will exacerbate the problem. Why buy a U.S. Treasury that doesn’t keep up with the real rate of inflation?
I agree with you, Stephen, particularly as to #1 and #2. The problem with the further future is that Americans are incredibly adaptive to change, and if this is allowed to take root, it will be almost impossible to undo. The question, then, is whether the 2010 revolution will be decisive enough to postpone Obamacare long enough to allow for its evisceration. If not, I think it may be come institutionalized, and future elections will be run on whether Republicans will “steal” or “cut” your health care, just as they have been on Medicare and Social Security for decades. Once that happens, it’s game over for conservatism. Heck, Republicans can barely gain traction with the argument that Obamacare will cut Medicare — which they admit it will!
>Once that happens, it’s game over for conservatism.
I share your concerns here whole-heartedly. I think that is the game libs are playing right now. They know once they put these things in place, it’s hard to dismantle them.
But I firmly believe the libs are on a 20th century strategy. The 21st century is going to be about how all of these countries with massive entitlements continue to fund those entitlements with anemic economic growth and dwindling populations.
My prediction continues to be there will be more and more pushes towards privatization in the industrialized world. Conservatives have a huge role to play here- making the argument for privatization, freedom and fiscal responsibility.
But you are right, that battle will be much easier if we don’t let them put in place the reckless programs to begin with…
http://americanmissive.com/2009/08/19/just-say-no-to-the-healthcare-public-option-and-yes-to-future-economic-growth/
The previous comments have painted a grim picture, indeed.
I am not so sure that the rest of the world would allow the U.S. dollar to deteriorate to the point where it is no longer the foundation for the global economy. I have read that some European nations harbor dreams of a new global currency, but at this point what other country is willing – or able – to accept the cloak that shrouds a world economic leader?
Or, for that matter, what other country can exhibit the economic history or stability to replace American resources, infrastructure, and economic and productive leadership?
The Liberal Democrats seem hellbent on destroying America’s power, planning on “rebuilding from the ashes” by modeling our nation after the failing “social democracies” of Europe and then acquiescing to participation in a “World Government” that will supposedly endow all countries with equal status.
Scary enough for you?
I agree with you here, Maine. Not many countries would want this burden. My uneducated guess would be of the ascending countries at present, China would be the one most likely to desire this role. They were a dominant culture for thousands of years until the military embarrassments of the 19th and 20th centuries and the delapitating misery of Moaism. I think there is a desire there to return to that status.
If China depegged their currency, it would rapidly strengthen, I think, and over time would rival the US dollar.
Of course, the path up for the Chinese isn’t easy, either, in my view. Much of their recent growth has been too dependent on government stimulus and loose credit. Further, they have the opposite problem of us, relying too heavily on exports. If their currency strengthened too rapidly, it could reverberate in a very negative way through their economy. Top all of this off with a one-child policy that structurally makes them an aging / male-dominated population, and they could run into trouble down the road. (My belief is this next decade will see them run into economic troubles).
Whatever the case may be, I think the long-term is brighter for Asia than the West, I’m afraid.
…but it doesn’t have to be that way.
Asia does appear to have the momentum, but the political climate throughout seems to be unstable.
Still, many countries in the region are in an ascension mode, while the West continues its decline through choice.
You are right; it does not have to be that way. But the present administration has structured itself around the conviction that American hegemony must be destroyed if “the world” is to benefit – ignoring the fact that it is the United States who has provided the strength and influence that has prevented the collapse of Europe and the stabilization that has aided the economic rise of many Eastern countries.
Strength is the antithesis of Liberal relativism and the U.S. will remain in decline and peril until we change our political landscape.
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