Tuesday, September 08, 2009

Obamacare will result in lower living standards for Americans

When combined with the massive defecits and the inevitable poor quslity of service we can expect from the plan as currently formulated, Lower living standards are an inevitable outcome.


"The CBO's deficit projections are based on the optimistic assumptions that the economy will grow at a healthy 3% pace with no recessions during the next decade; that there will be no new spending programs after this year's budget; and that the rising national debt will increase the rate of interest on government bonds by less than 1%. More realistic assumptions would imply a 2019 deficit of more than 8% of GDP and a government debt of more than 100% of GDP.

Such enormous deficits would crowd out productivity-enhancing investments in new equipment and software as the government borrows funds otherwise available to private investors. The result would be slower economic growth and a lower standard of living.

In the nearer term, the projected deficits could cause interest rates on bonds and mortgages to rise sharply if bond investors fear that the government will not prevent inflation. This is a greater risk now that more than half of the U.S. government debt is held by the Chinese and other foreign investors. Such an interest rate rise could kill a recovery in 2010 or 2011 and depress growth in the years that follow."
The "regressive" drumbeaters for government-run health care would not care about that sort of thing, as long as their cherished government health care program gets enacts. When their quality of living deteriorates because of the things discussed here, they will only see it as "a further failure of the free market philosophy" anyway, and agitate for further statism in our society.

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