The record of our federal government providing services outside of its constitutional jurisdiction is atrocious to say the least. It includes big wasteful bureaucracy, questionable accounting practices, and massive cost overruns. Speaking of cost overruns, Social Security, Medicaid, and Medicare alone face 10s of trillions of dollars in unfunded future liabilities. So it was no surprise this past week when Republican Senator Jeff Sessions’ office reported that it discovered the long-term funding gap of Obamacare to not be $1 trillion as the President has claimed all along, but a whopping $17 trillion. Nancy Pelosi was right all along – they had to pass the bill to see what was in it. And boy we are now beginning to see what a rook job has been pulled over on the American people.
Now, I suppose that costs don’t matter if you think government debt is irrelevant. After all America could never end up like Greece, Spain, Portugal, Ireland, or Hungary. And the Japanese, Chinese, and Arab nations will continue to buy up our debt allowing us to borrow cheaply for everything we no longer make but still need.
Unfortunately government debt is not irrelevant and the day of reckoning is coming. All Federal Reserve induced financial bubbles (dot.com, housing, etc…) burst eventually. The Fed’s U.S. debt bubble is no exception. It is likely that at some point our lenders stop buying our debt. Interest rates will have to rise dramatically to entice foreign investors to service our debt again. The Fed will print even more money to cover the shortfall increasing our debt further and devaluing the dollar to the point where exponential price inflation of goods and services will result. Life savings will be wiped out and Americans’ standard of living destroyed.
I’m not minimizing the problem of 40 million Americans without health insurance, but the consequences of the federal government being all things to all people will eventually destroy the economy for everyone. In fact, the reason health care costs are so high is precisely because of government involvement in the industry. In the first place, government limits competition through licensing laws and the drug approval process thereby eliminating an important mechanism in controlling costs. Secondly, increased government spending on health care bids up the price of care. If Obamacare is allowed to exist it will quicken our economic downfall. Insuring 40 million more Americans for a short period of time is little consolation for destroying our way of life.
At the end of the day, it is more likely the Supreme Court will void the law rather than Congress repealing it. Even if the Republicans were capable of intestinal fortitude, when January 2013 rolls around at the very least the Democrats will be able to prevent a cloture vote in the Senate and at the most a veto wielding Barak Obama will still be occupying the White House.