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June 28, 2012


The Congressional Budget Office figure I heard on the business channel was the cost to implement Ob*macare over the next ten years is 1.76 trillion after an initial estimate of 940 billion when it was shoved down our throats. Interesting how the figure almost doubled after it was passed.

I think the main effect on the economy will be on unemployment. Employers will be reluctant to add to their payrolls in the face of uncertain costs, thus helping to keep unemployment high. This effect could last for years until the mess is sorted out. If it ever is.

The Supreme Court, by declaring the mandate a tax and not a fee, has set a precedent where the government can tax any thing or any behavior that it wants to control or does not want you to do, i.e. everyone must drive a Chevy Volt or they will pay a tax. Anyone who eats Twinkies or drinks Big Gulps will pay a tax. Take a 10 minute shower instead of 5, pay a tax. Remember the Beatles song "Taxman"..."if you take a walk I'll tax your feet."

This is a scary precedent and a scary president.

He insisted that the mandate was not a tax and yet that is exactly what the Supreme Court has decided to call it.

tucson, Wikipedia is pretty accurate on stuff like this. Natiurally it will cost more to insure 30 or 40 million people, and provide other health care benefits. Question is, how does this affect the federal deficit?

Money is going out; money is coming in. Since outlays are projected by the CBO to be less than expenditures, the federal deficit will decrease. So the Republican dream of doing away with the Affordable Care Act would cost taxpayers money and increase the deficit.

Understand: some of the money to be spent under the ACA already is being spent by health care providers in the form of uncompensated care, patients (often low income), and so on. So again, it makes sense to look at the big picture. The Iraq war cost about a trillion dollars right? Why didn't the GOP make a big fuss about those expenditures?

Because they thought the money needed to be spent. Same thing with the ACA -- except now money is being spent to benefit American citizens, not foreigners.

Here's an excerpt from the Wikipedia article:


Expenditure estimates

In 2012, the Congressional Budget Office (CBO) projected the Act will require more than $1.7 trillion in gross federal spending over the period 2012-2022, some of which will be offset by penalties and tax increases related to coverage, resulting in net spending of more than $1.2 trillion.[183][177][184][176]

According to the Centers for Medicare and Medicaid Services, by 2019 the Act will increase expenditures on Medicaid and individual subsidies by $165 billion annually while reducing Medicare expenditures by $125 billion annually.[185]

CBO deficit reduction estimates

CBO - Deficit reduction under ACA

The 2011 comprehensive CBO estimate projected a net deficit reduction of more than $200 billion during the period 2012-2021.[186] CBO estimated in March 2011 that for the 2012-2021 period, the law would result in net receipts of $813 billion, offset by $604 billion in outlays, resulting in a $210 billion reduction in the deficit.[186]

As of the bill's passage into law in 2010, CBO estimated the legislation would reduce the deficit by $143 billion[187] over the first decade, but half of that was due to expected premiums for the C.L.A.S.S. Act, which has since been abandoned.[188]

Although the CBO generally does not provide cost estimates beyond the 10-year budget projection period (because of the great degree of uncertainty involved in the data) it decided to do so in this case at the request of lawmakers, and estimated a second decade deficit reduction of $1.2 trillion.[189][190] CBO predicted deficit reduction around a broad range of one-half percent of GDP over the 2020s while cautioning that "a wide range of changes could occur".[191]

I don't like how it all is estimates which already have gone up and changed drastically since the inception of Ob*macare. Nobody knows what X,Y or Z is going to cost in ten years. I imagine the ACA likely will be like a state of the art bomber for the Air Force and end up costing two, three, four or more times original estimates. That's just how it is with government because they don't have to meet a bottom line and they have a printing press to liquidate debt and "kick the can down the road" for the next generation to pick up. I don't see them being able to pull this off. It's too complicated to anticipate all the unintended consequences of 2400 pages of provisions.

I would rather see the health care mess dealt with by market factors and competition. Let the system fail under its own weight. Throw it to the wolves and let the phoenix rise from the ashes. I would rather have chaos than tyranny.

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