When Obamacare was thought up it was more than just a presidential pledge to woo the poverty-stricken Americans into believing (and voting) that healthcare should be provided for all and sundry and that any Tom, Dick and Harry could get through life by being provided for by the state. What it did was create a budget problem. As if the United States didn’t have one already and as if it needed an additional one to all of that. Whatever happened to the American Dream and the ideals of self-made men and getting through in life on toil and sweat? That all died long ago and is nothing more than a myth today, a long-forgotten memory that doesn’t stand for what the US is these days. You can be more of a self-made man in China today and that’s the land of opportunity. The US is just bankrupt and belongs to the banks. But, that’s the way they wanted it, isn’t it?
But, the land of opportunity looks as if it is going to come in for a rough time. The US is almost (if not already) bankrupt and the debt ceiling needs increasing. Obamacare is in the firing line as it’s costing trillions to set up. Wall Street today is even more closely linked to Washington than ever before.
- Obamacare has been estimated to end up costing a total of $1.1 trillion over the following decade.
- Although other predicted costs are said to amount to somewhere between $1 and $3 trillion over the next ten years.
- The administration of the US states that Obamacare will reduce the national deficit by $200 billion because it will be paid for directly through taxation and penalties.
- Spending cuts and caps on the growth in healthcare spending will also according to the administration bring down costs and in return the national deficit.
- We’ll wait and see if that actually happens.
But, right now there is an on-going discussion taking place in Washington where that sort of speech might be well heard. The Senate is going to vote as to what will happen to the US government. Down the tubes because they have absolutely no money left? Or, give Obamacare a clean bill of health and up the ante by extending the state budget ceiling? Some of us might just wish to see the vote go in the ‘no’ direction and for the US state to actually fold, finally forced to be made aware that the decades of frenzied spending and budget overshoots and years of borrowing when it’s impossible to pay it back, will finally have to come to an end. Obama will be remembered for being the hope of many people when they voted him in and yet he will also be remembered for actually increasing the budget deficit and for putting in place Obamacare that will just cost more than it can provide.
- The cumulative deficit under Obama has been the highest ever seen in the history of the US.
- But, it will probably just get bigger in the future as spending spirals and costs crescendo.
- Obama has a total cumulative deficit that stands at over $6.1 trillion.
- Obama blamed that on the previous administration under Bush. But, isn’t that what all governments do? It’s easier to blame it on the guy that leaves by the back door as nobody wants to talk to him anymore. Whether it was Bush or not it’s impossible to use the age-old it-wasn’t-me tactic and cherry-pick the figures.
- George W. Bush certainly notched up a tidy sum but way below what Obama has done.
- Bush had a cumulative deficit of $3.294 trillion over a two-term period.
- Spending on the War on Terror increased that deficit by $600-$800 billion per year in terms of military spending.
- By comparison, Ronald Reagan’s cumulative deficit of $1.412 trillion pales into insignificance.
- That’s also despite the fact that he increased government spending by 2.5% and cut taxation for the top income rate from 70% to just 28%.
- Reagan did double the deficit during his Presidency, however low the sum sounds.
- George H. W. Bush added $1.03 trillion in just one term, mainly due to the fact that there was a recession and he decided to wage war on Iraq over the invasion of Kuwait.
- No other President in the history of the country has ever increased the budget deficit by more than these four Presidents above.
- Obama tops the list.
Wall Street will be watching very carefully what goes on in Washington and what gets decided over the US government’s budget ceiling and the financial shortfall. Trading is expected to be volatile this week until the decision is announced on October 1st and Congress announces whether or not the US government will get funding to keep it afloat for at least a short while until more trillions are notched up.
The financial markets are perhaps starting to believe that there might be great difficulty in getting a deal which will keep the government running. It’s now banking on the fact that there may be a partial shutdown in departments to compensate. If that does happen, it won’t be the first time ever.
- It happened for 5 days in 1995 and then again for 3 weeks in 1996.
- The debt ceiling will be a bigger problem than it was back then and it will shake the stock market into choppy volatility.
If it happens, it will be short probably according to what most traders believe. If the discussion were about taxation or about spending, then it would be easier to hammer out a solution to the debt-ceiling issue. The crux of the matter is that it’s Obamacare that is causing the rift. The discussions over it are ideological and politically-motivated. It’s not a question of economics at all.
- The Dow Jones Industrial Average fell today by -49.71 to 15, 401.38 (that’s a drop of 0.32%).
Gold has also come in for a hammering over the slowdown in both stimulus and the threat of money being cut off for the funding of Obamacare. The Federal Reserve didn’t Septaper, contrary to what analysts had thought, but gold has continued to fall and has done for the past month now. Now that Septaper is behind us, there is talk of Octapercoming up. Are we going to be doing this until we rename every single month? It certainly makes the Federal Reserve lose credibility (if they still had any left after deciding to start the printing presses).
- Gold has dropped by 21% so far this year and not even the traditional metal can’t bring trust of investors back today it would seem.
- Gold for immediate delivery stood at $1, 315.08 per ounce today in London (that’s a drop of 0.6%).
- Silver also fell by 0.8% (immediate delivery) to $21.4795 an ounce in London this morning.
Cost of Healthcare
Putting a cap on the growth of costs that are charged by the healthcare industry may be a good thing. How’s it possible for the US to have one of the worst (in the sense that not everybody is covered by it and if you don’t have money, you can’t get easy access to it) health systems in the entire western world and yet at the same time have the most expensive one? Hey! There’s something wrong there guys! They should have sat down and realized that long ago.
- Healthcare spending in the USA increased by an average of 3% per year between 2009 and 2011.
- Healthcare increased in price by roughly just less than 6% per year in the 1990s.
- Based upon current trends, healthcare in the USA will cost a staggering $770 billion to the public sector between 2013 and 2022.
- Costs in the healthcare industry are increasing at a faster rate than any wage increases that the majority of the population ends up with.
- Government employees will be getting 2.1% this year according to forecasts (although that may well change if the government gets forced to close down certain departments, even partially).
- The average American will end up paying about 3% to 9.5% of income on health insurance.
- 8% is considered by the US state as an acceptable percentage of your salary that is paid towards health insurance. It would be interesting to know if the population agrees with that.
The American state cannot continue spending as if there were no tomorrow and just printing the greenbacks to fill in the gaps or paper over the cracks. The US administration can’t continually increase the budget deficit as if it were not liable or accountable for that money just to win votes. But, the US doesn’t do change for all its innovation and mine of resources available.
But, Americans still do one thing with unfailing fidelity and due observance; that never changes: they still utterly believe in their ability to be right and above all to be doing the right thing. So, they will carry on spending.
Food: Walking the Breadline | Obama NOT Worst President in reply to Obama: Worst President in US History?