Sunday, March 28, 2010

Dollar Savaging Via Obamacare

The Real Cost of "Obamacare"
(Or, Obama's Coming Massacre on the U.S. Dollar)

By Sean Hyman
Get ready for the latest attack on the U.S. dollar, courtesy of our Commander in Chief.
Or maybe I should say “Surgeon General” considering he wants to be personally responsible for our health.
Let me back up for a second. On March 23rd, President Obama signed into law a sweeping rewrite of U.S. health-care policy.
At first glance, it initially seems good.
After all, it supposedly gives an additional 32 million Americans access to basic health insurance by 2019. (We’re all hoping that most aren’t illegal aliens.)
One thing is for sure. It's the biggest change to the American health system since Medicare was enacted in 1965.
Again, that’s all well and good. But there are a few unintended consequences coming from this groundbreaking bill.
First of all, this healthcare revolution will cost $938 billion. That’s almost $1 trillion on top of the 12.67 trillion the U.S. already owes.
Now, if you ask the average person where that's going to come from, they don't know and probably don't care.
However, you have to remember that the government's income comes from the taxes that we all pay. So if they've got greater expenses, guess what that means? Greater taxation...and not just for the wealthy either (even though that's the way Obama pitched his plan to middle-income America who couldn’t care less if a few wealthy fat-cats pick up the bills).
But some may say, well wait a minute...most of these health care changes won't even start to take effect until 2014. So we've got a while before they start taxing us, right?!? Wrong!
One New Tax Went into Effect As Soon As Obama Signed the Bill!
Many increased costs will kick in next year. But did I mention that some taxes have already started as a result of this? Yeah, starting on March 23rd, any American who uses a public tanning bed will have to fork over a 10% tax for the privilege, starting IMMEDIATELY.
Yeah, Obama is not wasting any time.
Of course, it’s not just wealthy Americans who use tanning beds. Plenty of average Joes and Janes use tanning beds, especially in the dead of winter. That’s just one more example of how we’re all picking up the tab for this new health care bill.
But once these changes start, you can bet that employers will do more layoffs and will be inclined to hire fewer people. Why?
Companies with more than 200 workers will be required to automatically enroll their employees in whatever insurance plan they offer. When these corporations have these higher costs, they'll make cuts in payrolls in order to preserve their profit margins.
Obamacare Will Create 17,000 Jobs,But Did I mention Those Are All IRS Jobs?!
However, there will be one bright spot. Yes, one segment of our economy will be robust. Which is it? It's the Internal Revenue Service. They are hiring 17,000 new agents.
Wonder why they are doing that? Hmmmmm...
Could it be because they are going to need that many more bodies to help them rake in all of the additional tax money that Obama needs to pay for this? I think so.
Oh, but it gets better. Companies with 50 or more employees will have to pay a fine if their workers receive government-subsidized coverage.
Next on the "Obamacare loser list" is the wealthy.
Now perhaps you’re on that list. Perhaps you’re not. But regardless, this new “tax the rich” policy still affects you. Here’s why…
As you may have noticed, poor people don’t hire employees! No it’s wealthy entrepreneurs who need more workers. If you tax these rich business owners harder, they won’t have the cash they need to continue hiring.
These "rich folks" make about $200,000 - $250,000 a year, and they’re about to pay 0.9% more for Medicare Payroll Taxes.
(By the way, calling someone who makes $200,000 a year “rich” is only fair if you live in a place with a low cost of living. Tell a Californian he’s "rich" because he makes $200,000, and he'll laugh at you!).
Also, "these rich people" will have an additional tax of 3.8% on investment income like dividends and capital gains beginning in 2013.
Okay, but that's all of the "losers" right? Wrong! I'll not go into great detail on the rest but here are a few other groups that will get hammered:
Believe it or not, within the health care reform, banks will lose the government backing/ guarantees on education loans. So schools will have to go directly to the Department of Education for funding.
"The Insured" will also lose out. Experts say we could see "double digit" increases in some places like California (and that's just for people who make above $88,000 a year).
Add it All Up, and You Have an ExpensiveProgram We’re All Paying for
So when you put all of the pieces of this together, you're going to see higher taxes coming (and not just on the rich), higher unemployment and lower new employed rates, increased health care costs, etc.
All of this will be yet one more weight and hurdle placed upon corporate America.
So if you think these companies are struggling now, wait until all of this comes to a head in a few years. You haven't seen anything yet.
In the Long Run, "Obamacare" Spells Trouble for the Buck!
This will all take a huge toll on the U.S. economy. It will likely make our economy even more sluggish.
Think about it. If consumers and corporations are taxed more and have higher costs, then they are not going to spend as much. When spending is restrained, the economy struggles.
So this long-term "ankle weight" that's being placed upon the U.S. economy will end up eventually taking a long-term toll on the dollar as well.
Oh it probably won't affect the dollar immediately.
In fact, in the short run, if stocks, bonds or commodities were to fall it would actually help the buck for now. But over longer periods of time, there's no way that the dollar can prosper when the entire nation is hurting from the extra yoke placed on both consumers and businesses. So take this as yet one more warning to get the heck out of the dollar! Use rallies in the dollar to get some long-term positions into foreign currencies and “hard currencies” like gold and silver.

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