Obama the Deficit Hawk?

Democrat Healthcare Ponzi Scheme Designed to Fulfill Deficit Reduction Promise

Shortly after becoming President , Barrack Obama announced his plan to cut the deficit in half by the end of his first term. He then proceeded to pass the nearly $800 billion stimulus plan, the $1.2 trillion omnibus spending bill, and posted a record $1.4 trillion deficit for the fiscal year ended September 2009. According to the Congressional Budget Office (CBO), the federal government has already racked up $292 billion in debt for 2010 fiscal year – in just two months! A new record! Mr. Obama recently doubled down on his deficit claims by returning to talk of ‘fiscal discipline.’

Pile on top of that a massive $800 billion plus healthcare bill, and you have to wonder how he can possibly fulfill that promise. But you see, the healthcare bill winding its way through Congress will actually cut the deficit – or at least give the illusion of deficit reduction. In the short run at least, which is all Mr. Obama cares about. The Congressional Budget Office (CBO) has scored it as deficit neutral, or even reducing.

How is it even possible to enact a massive new entitlement and reduce the deficit? The healthcare bill, as it is currently written, is a massive tax and spend Ponzi Scheme. It relies on budgeting gimmicks – and the fact that CBO only looks at ten year time horizons.

A Ponzi Scheme works by collecting money from suckers by promising them a huge reward later. The taxes in the healthcare bill begin immediately in 2010, while the actual benefits don’t start until 2013. It would be like buying a new car, starting to make payments now but picking up the car in 4 years!

The schemers then take money from new ‘investors’ to pay off the original investors. But like all Ponzi Schemes, eventually there are not enough new suckers and the scheme comes crashing down. Think Bernie Madoff.

Many estimates put the actual cost of the Democrat healthcare Ponzi Scheme at more than $2.5 trillion per year when fully implemented. The only way to pay for it then is a massive tax increase, or rationing of care. Both are nearly certain in the future if this bill passes.

But, in 2012, Mr. Obama’s promised deadline for cutting the deficit in half, there will be all the tax revenues but none of the spending. While we will get vague promises of ‘healthcare lock boxes’ and other gimmicks to assure us that the new taxes will be pledged for future health care expenditures, the reality is the dollars will go into the treasury, where mixed and mingled with all other taxes it will be counted as current revenue, off-setting massive government budget and entitlement expenditures, thus creating the illusion of a reduced deficit. Paying off the original suckers who got in on the Ponzi scheme while putting in peril the American healthcare system.

Of course, this equation like all Democrat tax increases before it, uses a static model rather than a dynamic model. In other words, it assumes all economic activity remains constant or in fact grows and calculates healthcare tax revenue on this growing economic assumption. But any healthcare taxes, like all tax increases, reduce economic output and therefore will reduce all tax revenues.

Mr. Madoff, the most famous recent Ponzi Scheme perpetrator, wound up in an orange prison jumpsuit. Mr. Obama and his cronies are counting on re-election, and will be long gone before the healthcare Ponzi Scheme comes crashing down.


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TJPaine
Un^Common Sense
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