Much of the talk about Obamacare right now is centering around the problems with the website, transfer payments to insurance companies and cancellation of existing plans. However, the biggest issue is that Obamacare itself is a nuclear time bomb waiting to explode on the American economy. Most people do not see what is coming even though many warnings are already out there.
One might look at an economy as a complex bio system. One cannot simply inject new organisms into the bio system without many unintended, or possibly intended, consequences. Obamacare is one such example. This massive injection into our economy is already having deleterious effects. Yet, the most dangerous effects are yet to be seen. Obama care will act on the US economy like a rogue parasite, destroying savings, incomes, jobs, and a whole host of other dependent economic organisms in the economy.
First, examining the cost in jobs just in 2013, from Obamacare. On November 7, 2013, Freedomworks published a shocking list of announced layoffs directly due to Obamacare and the 20 taxes it contains and the mandates it places on employers, many of which were in the health industry itself. Even CNBC’s Maria Bartiromo recently said that Obamacare was creating a nation of part-time workers. (Watch video clip here.) In fact, based on some estimates, 90 percent of the jobs being created in this country are part-time.
Part-time jobs generally have no benefits. This means no employer paid healthcare, no participation in 401K or other retirement vehicles, paid vacations, and the like. This creates an economy of beleaguered workers simply exchanging hours for dollars, and then hopefully having a second place during the week to go and do the same exercise all over again, for no benefits.
One could scream at the employers for doing this to the workers, and they could in part be right. However, whenever government intrudes into a system like an economy and starts placing regulations and laws in place, businesses will adapt, just like organisms, to survive. An old business professor of ours once said, “The purpose of a business is not to make a profit. A business is like any other entity; it seeks first to survive, and then only after that, to thrive.”
In a toxic regulatory environment such as the U.S. economy is today, just like a toxic environment or biosphere, organisms or entities will adapt first for survival, and then a few which are best suited or have an advantage in some way will thrive. Right now, businesses are simply in survival mode, and so are those workers who can still find and hold a job.
Destruction of Family Budgets
Putting aside all of the talk of plans being cancelled, even though some mandates have been pushed back until November 15, 2014, and all of the other stories, most people are, in fact, being forced into Obamacare plans at this time or facing the penalty of not enrolling at all and facing life as uninsured. For the young and healthy, this might make sense. The penalty of one percent of gross income is not that much compared to some of the premiums and out of pocket costs of Obamacare. However, for families and those for whom facing life without health insurance is not an option, the damage is going to be catastrophic to many family budgets.
Many families, especially those with a single-parent head of household, are already barely getting by, many on a combination of part-time jobs. There just is not a lot of room in most family budgets for extra expenses. One does not have to look far to find many cases of individuals reporting that their premiums are going up from as little as 40 percent to 200 or even 300 percent. When one combines this with out of pocket costs under Obamacare also going up by double or even triple, the recipe for disaster in a family budget is complete. Something will have to give.
Unlike our government which can simply go to the non-governmental Federal Reserve and borrow more money or simply order the printing of more money, the American family has to live within its means. There are only so many jobs one can take on or so many additional ways to generate extra income. Eventually the upward limit of income production is reached for the available marketable skills of the wage earner(s) of the family.
There is an upward limit, and eventually hard choices are going to have to be made as families become slaves to their health insurance premiums.
The Great Ripple Effect
What will happen will be a great ripple effect through the economy as more money from family budgets starts to be diverted to health insurance costs under Obamacare. Families and individuals will start cutting back on:
- Eating out
- New Cars
- Home Purchase/Upkeep
- New Appliances
- Services (Yard Care, Dry Cleaning, Etc.)
- Discretionary Spending
- Even Groceries
- Savings and Investments for Education, Retirement, Etc.
This is just a general category list, but the picture becomes clear. In each of those categories are workers and businesses who rely on those consumer dollars in order for them to remain employed and in business. The end result is painfully obvious: More job and business destruction — More destruction of the middle class.
One could not have ordered up a more potent nuclear bomb to take out the American economy, destroy the middle class, and create more dependency. The middle class has always been the target. The middle class was the last remaining pocket of independence in America. The poor were already dependent on government and willing to sell their votes to keep their share of the public largesse flowing their way. The politically connected wealthy already had their loopholes and crony favors in place and could be counted on for their unfailing support.
The final target is at ground zero, the middle class is in line for destruction. And it was all sold with such beautiful lies.