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User Info Another (Sad) Casualty Of Schwantz-Gobbling; entered at 2017-01-09 09:52:53
Tickerguy
Posts: 147623
Registered: 2007-06-26
Congress will likely repeal the mandate and probably the subsidies (which they can force through reconciliation.) They can't do one without the other because if you get rid of the subsidies then most people under $50k/year in income are exempt anyway (due to the cap on income .vs. insurance price before you're exempt) so both will go at once.

However, once that happens then the system collapses instantly, because everyone like me who is willing to pay 50 cents/month for what amounts to cat insurance that we never use for anything (other than in the event we're hit by a bus) drop our policies instantly. I won't pay $400+/month for that but the $400/mo subsidy in fact winds up paying a crack-head's medical bill, since I use zero. Without the subsidy going from those of us who use zero (and pay near or actual zero) to those who use a lot but can't pay the entire rape-the-public system blows up in an afternoon.

The "answer" to this will be to block-grant Medicaid (to stop the detonation on the federal balance sheet from poor people) and balance-billing (to steal half a trillion a year from Seniors who have 401ks and IRAs.) Price has tried to get this through in the past; his appointment by Trump guarantees that this will be the approach, as Trump is well-aware of his legislative record.

People like myself will go naked and take our chances with being able to employ medical tourism if we need to, accepting that in an acute situation we're gonna die. I'm ok with that. Many others will not be. But that's the new paradigm you better be prepared for, and if you currently NEED medical care (or drugs, etc) on a daily, weekly or monthly basis YOU ARE RAT****ED HERE AND NOW -- you just don't know it yet.

Whether that will be enough to prevent the detonation of the budget for a few years is an open question, but it might shift the problem BY A LITTLE WHILE. In other words it might buy another 2-3 years of "moderate" growth in federal expense much like Obamacare did for 2 years before the former 9%ish compound rate of expansion resumed.

The problem is that in doing so it will destroy one of the few remaining capital bases in the economy -- retiree savings and portfolios, and at the same time it will force States to either literally condemn Medicaid patients to die for lack of money or bankrupt themselves trying to accommodate 9%+ expansions annually in the cost of the program. Treasury counted on tax-deferred assets being taxable in retirement "as spent" for its future projections, which is why the Roth has limits on it (otherwise everyone would have gone that route and paid up front, then been exempt on the back end.) With that gone as a revenue source federal funding will collapse a few years down the road both for government and private industry capital formation at roughly the same time a million Medicaid patients per year will get shoved in the hole.

IMHO my best guess on timeline for the detonation being apparent given that set of changes is ~4-5 years hence, which puts us past the next election -- just long enough. If Trump manages to blame the Democrats in the states where most of the deaths will occur during his second term, and he probably WILL get away with this (California, Illinois, New York and New Jersey to name four) then he gets through his second term before the FEDERAL budget detonates -- maybe.

It's the same gambit, more-or-less, that Obama ran with Obamacare -- except this time we've expanded the sphere of the explosion from the federal budget to ALL of the states and ALL private capital formation at the same time. That's how exponential expansion works -- you stave off what you need to do by dicking around and the harm expands EXPONENTIALLY as well.

I'm going to enjoy the last few years of reasonably-normal conditions in this country. Eight years hence you won't recognize the United States, if we get lucky. One policy mistake in the middle, however, and it'll be three or four years before it all goes to **** -- and the odds of not making a policy mistake for that long, or just the business cycle turning and a recession showing up, aren't real good.

Last modified: 2017-01-09 10:05:21 by tickerguy

2017-01-09 09:52:53