atomic_fungus (atomic_fungus) wrote,

#1992: The long term

The leftist media are crowing over the Democrats' successful seizure of 1/6th of the US economy. And the end of the first paragraph begins lowering expectations: "...a climactic chapter in the century-long quest for near universal coverage." (Emphasis mine.)

"Near-universal"? "Near"? For decades all I have heard from the left is an unending chant about how we needed universal health care in order to take care of the poor and downtrodden. Now the commies finally got the thing, now they're admitting that true universal coverage is impossible.


I'd wager this bill represents the single largest tax increase in US history; and realizing that got me to thinking: what's ahead of us now? I mean, besides long lines, waiting lists, rationed care, filthy hospitals, and high taxes?

Although the experts claim otherwise, arguably we are mired in the middle of one of the worst recessions of the last century. It depends on how you figure it, of course. The experts are using this definition of recession:
One or more consecutive fiscal quarters with zero or less economic growth, as defined by the GDP.
If GDP can be held above zero, however farcical, you're not in a recession. If GDP growth is negative in one year's second and third quarter but positive in the forth, then the new year starts with a non-recession economy.

By the definition above, the big recession of 2009 is over. Unemployment has not improved to any real extent and the economy is not recovering, yet there is no recession because the fourth quarter of 2009 showed a 5% gain even while the entire year of 2009 showed a 2% loss of GDP. In other words: the GDP in January 2010 was 2% smaller than the GDP in January of 2009, but because the fourth quarter showed an increase, there is no longer a recession.

In previous posts here I have been over and over the statistical tomfoolery which the federal government has been playing with the GDP in order to make things look better than they really are; and in fact this tomfoolery did not start Jan 20, 2009. In fact, it goes all the way back to Bill Clinton's first term in office.

The important points to bear in mind:
#1: In 2010 there are fewer private sector jobs in the US economy than there were in 1999
#2: The US government is consuming 30% of the GDP, carrying deficits which are 1000% (10x) of the deficits just 3 years ago
#3: Unemployment is at record levels, the heights of which we haven't seen since the 1930s
#4: Nothing has been done to correct the conditions which led to this recession
#5: The Democrats just passed the largest-ever tax hike in US history
This is not good news.

ObamaCare is going to cause a Depression exactly the same way Smoot-Hawley caused one in the 1930s.

Don't expect the Dow-Jones to plummet like a stone today. I'm thinking it will drop some, but it won't be off even 500 points. I have trouble believing there'll be that much of a dip: the guys who run Wall Street are largely Democrats and they'll accept the fudged CBO numbers. Yes ObamaCare raises taxes, but I expect the taxes not to go into effect before January 1, 2011.

(Initially I thought some would start July 1, 2010, with others to phase in Oct 1, 2010 and the remainder to begin Jan 1, 2011. Then I remembered this is an election year. So probably the whole schmeer will hit next Janurary.)

But: businesses will not hire people. The taxes are too high. Is that part-time job provision in, the one which counts part-timers as as full-time for the purposes of determining insurance fine liabilities? I don't know, but it doesn't matter: expect U6 to be 20% before the end of the year. Some small businesses will trim jobs to squeeze under the limit.

U3 won't grow larger, although the extension of unemployment benefits will continue. What are they at now, 80-odd weeks? More than a year, I know that. But at that, unemployment compensation isn't really a "living wage", so even the U3 unemployed won't have the money they need to consume enough to boost the economy. The U6 folks won't have even that much.

(I should say U3 won't grow larger at first. Not before next year, certainly, when the taxes hit.)

The provisions of ObamaCare make it nearly impossible for health insurers to make a profit. Many will go out of business; some will be absorbed by other companies. Those who work in the health insurance industry face mass layoffs.

The provisions of ObamaCare also make it nearly impossible for the health care industry to make a profit. Recall that a few days ago a survey was released saying that about 30-40% of doctors expect to cease practicing medicine once ObamaCare goes into effect. Unless the government plans to conscript these people and force them to practice medicine, it means fewer doctors seeing more patients. It also means unemployment for a broad swath of people who service the medical industry. Let's say that 35% of doctors cease practice. Let's further say that every two doctors share a secretary. How many secretaries lose their jobs when the doctors who they work for quit? And that's just secretaries.

In any case, we're in a severe economic slump, and the Democrats have just raised taxes. What do you think the tax increase is going to do for us?

I'm thinking not less than four to six years of depression, followed by a war. That's how these things have gone, historically: you have the economy go bad, some morons do something stupid which exacerbates it (usually because they get more power and wealth out of the deal) and then there's a war.

I figure the tax hikes will be the trigger for the depression. If they take effect Jan 1, that gives us a bit more than nine months to get ready for it. Stock up on staples which can be stored. I don't think you'll need to stash away drinking water but you'll want beans and rice and flour and sugar, and other things besides. Put together a garden, too. Get a gun, learn to use it, and stock up on ammunition. (If the tax base crashes, so do the budgets for POLICE.)

Expect gasoline to cost a lot. Buy a small car, learn how to keep it running.

The depression won't last forever, but it'll seem like it. (Re-acquaint yourself with reading, and writing, because you're not likely to have the money for expensive entertainment.) It will end with a total war; our economy will ramp up to wartime production and we'll be back to the slogans of WW2: "Make it last, use it up; make it do, or do without!" because the armed forces will need just about everything. So we'll still be making our own fun at Christmas parties until that war ends.

I'm not being Disaster Mouth, here; read history and you find this is how these situations always play out.

It's what everyone expected by the beginning of the Carter years, and in getting rid of him, by the grace of God, we elected a President smart and strong enough to turn that tide. But we cannot expect to be so lucky again, at least not so soon.

* * *

Yeah, it's "doom and gloom". I hadn't really gone much beyond "ObamaCare is going to pass"; I know (and knew) it'll lead to the ruination of our health care system but I hadn't looked at the larger picture.

I don't like what I see. What I see is informed by my knowledge of history; the wrong conditions lead to depression and depression leads to war, always always.

We had a chance of escaping that, but Obama and the Democrats have now taken that chance from us. Unless this turd can be repealed before it can do much damage, we're going to march right down the same old gauntlet.

* * * stupid is this:
Subj: Ungrade Your Account
Dear user
We would like to inform you that we are currently carrying out
scheduled maintenance and upgrade of
our email service and as a result of this our client has been changed and your original password will
reset. We are sorry for any inconvenience caused.
To maintain your account, you must reply to this email
immediately and enter your current Password here( )
Failure to do this within 48 hours will immediately
render your account deactivated from our database.
Thank you for using the account!
©ATT ACCOUNT ABN 31 0822 3766 504 All Rights
Reserved. AT&T Account Maintenance 2010

I suppose that's truth in advertising. It's certainly an "ungrade" to give some spammer the password to your e-mail account.

At least this one has a current copyright date. The last phishing e-mail I got gave a copyright date of 2006.

  • Post a new comment


    default userpic

    Your reply will be screened

    Your IP address will be recorded 

    When you submit the form an invisible reCAPTCHA check will be performed.
    You must follow the Privacy Policy and Google Terms of use.