Understanding Obamacare Part 3: The Government’s Fiscal Heartbeat
When I set out to write a weekly column on Obamacare, I could not have imagined what a daunting task was before me. I thought it would be simple enough to read the entire bill and then break it down, section by section, and explain it so that we could all better understand how the new healthcare legislation will ultimately affect everyone. Small business owners, health care providers, seniors, patients with chronic illnesses…everyone has a vested interest. I planned to leave the politics out of it, to the best extent possible, and just focus on the facts. However when I interviewed doctors and small business owners, I found that people are so passionate about this issue and have so much to say, that the politics always made its way back into the discussion. Still, I will do my best to present facts only. Texas PolitiChick Lara Maertans Rhea
Before I write more about mandates, the Supreme Court Ruling, or what else is buried in the healthcare bill like hidden taxes, I thought we should delve into some financial matters.
First, I have a small quiz for you. Some answers might surprise you:
1. What will Obamacare cost the government over the next 10 years?
2. Where does the government obtain this money?
3. What is the current National Debt?
4. Can you name 5 government-run businesses?
5. Can you name a single government-run business that is successful- either operating effectively or for a profit?
During a joint session of Congress in 2009, President Barack Obama said his health care law would cost $900 billion over the next ten years. Based on the Congressional Budget Office’s recent estimates, however, it is looking like it will be closer to $1.4 trillion. Now I know that with the National Debt reaching over $16 trillion to date, maybe that doesn’t seem like a big deal. We have all become anesthetized to hearing the words–millions, billions, trillions…but eventually It all adds up to real money, right?
Did you know that with 313 million citizens in our country, this means each person’s share of the debt is over $52,000? That’s just today. Since the debt increases an average of $3.91 billion a day (with a “B”), imagine in a year or two where that figure will be?
Okay so a trillion dollars looks like this: $1,000,000,000,000 (that’s 12 zeroes). $1 trillion is a million million dollars. A trillion seconds is 32,000 years. If you stacked a trillion one-dollar bills on top of each other, they would stretch from the earth to the sun! It would take a jet traveling at the speed of sound 14 years to fly past one trillion dollar bills! Just take a moment to comprehend that. Now multiply that by 16.
A billion is a thousand million. A billion seconds ago it was 1980. A billion hours ago man had not walked on earth. A billion dollars ago was only a few hours ago at the rate Washington spends it.
Congress spends a million dollars every five seconds. A million seconds is 12 days. A stack of one million dollar bills would reach the top of a 35-story building. By the way, a stack of a billion one-dollar bills would reach 68 miles high into the earth’s atmosphere. I love doing this math, but boy is it depressing to really see how the numbers add up.
When Obama took office on January 20, 2009, the National Debt was $10.7 trillion dollars. Four years ago the government launched massive bailouts of companies like AIG, GM, Ford, and Chrysler, which bothered some, but the fact that it has not been repaid over $200 billion doesn’t seem like much anymore in the grand scheme of things.
What other institutions do we find government involvement? The U.S. Postal Service, Social Security, Fannie Mae, Freddie Mac, Medicare, Medicaid, AMTRAK, the U.S. Transportation System, the Public School System, the U.S. Prison System, to name a few. The incredibly bad news is that all of those are failing and either bankrupt or on the verge of it. Remember when the government established “Cash for Clunkers” in 2009? It put hundreds of dealers out of business because the government never paid them what was promised. It is clearly fair to say that our government is very bad about over-promising and under-delivering when it comes to financial matters.
According to the Economic Policy Journal In 2010, 38 states were officially bankrupt. Today’s number is probably higher. You might not know that states cannot declare bankruptcy, but 28 states allow their cities to file for bankruptcy. Recently, three cities in California filed, along with over 20 others across the country. There are untold numbers of cities on the brink of insolvency, however.
Part of the broken system are public schools which rely on local taxes and federal money but still cannot make ends meet. Last year there were massive cuts in budgets allocated for teacher pay and staffing. The prison system is also failing financially. In 2007, Reuters reported that longer prison sentences and parole terms have driven up the prison population with little reduction in crime. That broken system costs U.S. taxpayers over $40 billion per year. The list of what is financially collapsing thanks to government bureaucracy, waste, and over-spending is endless.
When we talk about the “official” U.S. debt of $16 trillion, realize that this figure does not include the liability from Social Security and Medicare. After you factor that amount into the equation, Forbes says the number actually exceeds $120 trillion. Remember folks, the only income comes from U.S. Federal tax revenue, and that is coming only from those paying into the system. According to the Heritage Foundation, the top 10 percent of earners pay 71% of all income taxes. The bottom 50% of earners pays only 2% of all incomes taxes. Half of all filers pay no income taxes at all. Some 30-50 million people living and working in the U.S. never even file. So the total U.S. revenue generated by taxes only comes to around $2.3 trillion, leaving quite a shortfall.
According to the Chicago Tribune in April of this year, Social Security is now three years closer to depleting its resources. That means by 2033, the well runs dry. They also say that Medicare is “on life support.” It is projected to run out of money by 2024, and disability insurance is expected to run out by 2016, in just four years.
So you get the idea. Everything the government touches finically crumbles at the national level, and it’s trickling down to state and local governments that are more and more dependent on federal dollars. States like California with more than its fair share of social programs and not enough income to shoulder the burden are going downhill the fastest. Higher taxes and unions have left little incentive for people to do business there, so many sources of revenue have dried up.
The U.S. has experimented with national healthcare in the form of Medicare and Medicaid, and both of those will be bankrupt soon. Is it possible that the government will do a better job with Obamacare? Maybe that is why so many legislators didn’t even bother to read the bill they passed. Maybe in the end, they realized our country doesn’t’ have enough money in the system to pay for it anyway.
For now, however, this legislation is going forward as long as we have the trillions needed to pay for it.
Next week I will revisit the mandates and explain what happened with the Supreme Court ruling. Then I will share more about those hidden taxes and other surprises found buried in the bill. Just remember when you vote this fall how important it is to elect people who share your views, not only on what is acceptable for the health of the individuals of this country, but those who are going to care about the financial health of the U.S, as well. God bless.
Click here to read Understanding Obamacare Part 1
Click here to read Understanding Obamacare Part 2