Capital Research Center:
- Given the enthusiasm for reactionary economics in the ranks of the victors on Election Day, it seems highly likely that they will repeat the same policy mistakes of the Hoover-FDR era. The recession we now appear to be in could, with a coordinated Big Government approach to policy, be fairly easily parlayed into a full-blown depression.
The incoming powers-that-be want to massively increase government spending well beyond the excesses of our current pretend-conservative president, repudiate free trade, raise tax rates, and give tax “refunds” to people who don’t have incomes.
America appears poised to get change — good and hard.
This was written about the time the Democrats were trying to push healthcare legislation through as the legacy of Ted Kennedy, but the points remain the same, about how the current proposed healthcare legislation will negatively impact our economy, and further slow growth:
America Health Choices Act Consequences
1) Every employer thinking about hiring someone is going to think twice about it, then not do it.
2) Every employer struggling to maintain jobs in the US with a choice of outsourcing will have another huge incentive to outsource.
3) Many employers struggling to maintain solvency will go bankrupt after this bill passes.
4) Corporate profits across the board are going to drop.
5) The stock market will drop along with corporate profits.
6) Health care companies will have an incentive to not offer plans in states with poor demographics.
7) Government mandates about how much insurers can charge will bankrupt insurers and/or cause rationing of services.
8) Businesses will have an incentive to fire workers and instead offer contract work to individuals. Banks and financial institutions will be among the first to consider this option. Programmers have another reason to start worrying about their jobs.
9) Businesses unable to outsource or make use of contractors will bear the brunt of this legislation. The group hardest hit will be retailers like Walmart, Target, and Costco, and restaurants like McDonalds and Pizza Hut.
10) This bill will weigh on business expansion plans. Retail stores are already saturated. This bill provides one more reason for businesses not to expand further.
Business Owners Should Be Scared To Death
In general: The bill has a negative effect on hiring, a negative effect on business expansion, a negative effect on corporate profits, and it promotes outsourcing. Moreover, it will delay the recovery of the stock market and it puts the brunt of the burden on businesses that cannot outsource.
If you are not scared to death by those consequences, you are not paying attention to what is happening.
Requiring businesses to pick up the tab will slow hiring and the recovery. Monetizing medical expenses [i.e., the federal government printing trillions of dollars it doesn't have, to pay for public healthcare] will cheapen the dollar. Requiring taxpayers to foot the bill will take away from discretionary spending.
It is axiomatic that someone must pay. There is no such thing as a free lunch or free health care either.
I have come up with 10 easy to see consequences. I am sure there are many unforeseen consequences, some of which will be even worse.
For those who want more for their money in these deflationary times, here is a bonus 11th consequence: It will encourage the employment of illegal aliens under the table paid in cash and all kinds of underground barter transactions that also will not be taxed.
And yes, this is a formula for stifling economic growth by punishing entrepreneurship, that mirrors that of FDR in the 1930s.
