December 2, 2009

Meet America's White Elephants (Healthcare, War, and Deficit)

How will the Obama administration pay the tab? 

  • $30 billion for additional troops in Afghanistan

  • $1 trillion Universal healthcare plan

  • $700 billion TARP

  • $800 billion Stimulus plan

  • Expanding US deficits

With an economy barely in the recovery stage - President Obama and his administration is utilizing "deficit spending" to get the economy back on track, the consumer spending again, and to pay for the war in Afghanistan.  One potential fall back is that as the Fed prints more money, the more worthless our dollar becomes....which means all of the dollars in our paychecks and savings accounts become a little less powerful - and the cost of food, gas, and /utilities become more expensive.

I'm not sure how the Obama administration will pay for everything without raising taxes (which politicians tend to avoid so they may be re-elected) or allowing inflation.  The Fed is already considering ways to take money (bailout money) out of the system to prevent the potential of hyperinflation, yet they must be careful not to send the economy into stagflation

Will Universal healthcare be the answer?  Tax the rich - they say - and quality healthcare will be provided for all.  But at what cost?  And how long will the rich pay for it before the government needs to expand the base of taxpayers? (i.e. Tax the rich AND the middle class)  In a WallStJournal article, "France fights Universal Care's High Cost" France's Universal healthcare system is in a crisis...and France is looking to become more American where they allow copays to combat the high costs associated with their system coined "Assurance Maladie".  Universal healthcare in the United States could potentially become a disaster in the long run.  Why doesn't the government leave health insurance to the private industry - but enforce caps on health insurance's rate of increase and eliminate pre-existing conditions?  Might be a little cheaper and more acceptable to critics then Universal care.

  • Fix the economy first - then everything will fall into place.  If people have jobs, then they can afford their own health insurance or some supplemental plan and people will be less dependent on rich people footing the bill.

  • Provide tax credits for businesses that have new hires - this will be an incentive to get employers back to hiring (which reduces the 10% unemployment rate) instead of cutting costs and keeping their cash/record earnings in the bank

  • If people have jobs - then people will spend more money instead of saving it.  Consumer spending is 2/3 of the economy.  Then we can allow the government to stop spending/printing so much money.

Let's get rid of these white elephants....ASAP~!


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