Posts Tagged ‘fiscal deficit’

China Fears ObamaCare Causes Economic Cancer

November 17, 2009

The Chinese have a little different medical philosophy than Western doctors.  But when it comes to dollars and cents, Chinese math and Western math are very much alike.

The Chinese are looking at the numbers of dollars (trillions of dollars, mind you) of ObamaCare.  And they do not like the rapidly growing economic cancer that they see.

From Reuters:

James Pethokoukis
November 16th, 2009
China questions costs of U.S. healthcare reform

Guess what? It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions.

Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

Nothing happening in Washington today should give Beijing any comfort or confidence about what may happen tomorrow.  Healthcare reform was originally promoted as a way to “bend the curve” on escalating entitlement costs, the major part of which is financing Medicare and Medicaid. That is looking more and more like an overpromised deliverable.

For instance, a new study from the U.S. government’s Centers for Medicare and Medicaid Services finds that the healthcare reform bill recently passed in the House of Representatives would increase healthcare spending to 21.3 percent of GDP by 2019 compared with 20.8 percent under current law. That’s bending the curve the wrong way. The study also questions the “long-term viability” of the $500 billion in Medicare cuts meant to help pay for expanded insurance coverage.

In addition, the CMS study gives a clearer cost estimate than the one provided by the Congressional Budget Office. According to the CBO, the 10-year cost of PelosiCare is $894 billion. But that analysis includes early years with little government spending, According to the CMS, the House approach would cost $1 trillion from 2013-2019, or some $140 billion a year when fully put into effect.

Few realists in Washington think any of the current reform plans make a significant dent in the long-term healthcare cost to government. Indeed, the Senate Budget Committee recently held hearing about creating a bipartisan commission to find solutions to America’s entitlements problems.

If healthcare reform really bent the curve, there would be a no need for such a commission to do Healthcare Reform 2.0.

The Chinese might want to keep up the questioning
.

Think about the $894 billion estimate, versus the new $1.4 trillion estimate ($140 billion times 10 years) which has based on more accurate information (The CBO estimate was based on the Democrats’ warped claims and figures).  The difference is $506 billion – stacked right on top of that $894 billion.  We’re talking about an increase of 56.6%.  That’s a rather huge difference.

I’m glad that the Chinese are smart enough to realize that playing games with numbers isn’t going to get the job done.  I wish the American people would be that smart.

It is frankly amazing that Obama is literally to the left – and WELL to the left at that – of a communist country when it comes to attempting to forge a big government monopoly over yet another 1/6th of the economy of a once-great capitalist nation.

China is worried about the United States imploding under the weight of its own indebtedness, and therefore being unable to pay them back or buy their products in the future.  If we have any wisdom left, we would be worried about the same thing.

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