Posted on 11/30/2009 12:07:07 PM PST by Nachum
ongressional Democrats are using several budget gimmicks to disguise the cost of their health care overhaul, claiming the House and Senate bills would cost only (!) about $1 trillion over 10 years. Now that critics have begun to correct for those budget gimmicks, supporters of ObamaCare are firing back.
One gimmick makes the new entitlement spending appear smaller by not opening the spigot until late in the official 10-year budget window (2010–2019). Correcting for that gimmick in the Senate version, Sen. Judd Gregg (R-NH) estimates, “When all this new spending occurs” — i.e., from 2014 through 2023 — “this bill will cost $2.5 trillion over that ten-year period.”
Another gimmick pushes much of the legislation’s costs off the federal budget and on
(Excerpt) Read more at cato-at-liberty.org ...
Is that 6 Trillion per year?
Usually they mean over ten years.
ping
0bama will have to trim that figure. The Death Panels will now have to deny medical care to anyone over 25 to get the books back in balance.
Actually, it is 6.25 trillion over 10 years.
“Actually, it is 6.25 trillion over 10 years.”
Assume no inflation in the general economy or healthcare (clearly wildly optimistic assumptions). A commitment to spend an added $625 billion a year over the next 100 years is the functional equivalent of the government taking on a $19.7 trillion mortgage with a term of 100 years. Unfortunately, by the end of this 10 year period, this particular lender already will be $19T in debt due to other obligations incurred by this president.
An additional consideration is $104T in unfunded liabilities related to other commitments made by this borrower.
The aggregate net worth of this borrower—assuming it could seize and sell every asset owned by its citizens—is about $60T.
In short, the liabilities of this borrower exceed the most generous conceivable estimate of its assets by about two to one even BEFORE one considers adding this $19.7T new liability.
The annual net income of this borrower over this 10 year period will be about $490 billion [http://www.whitehouse.gov/omb/budget/fy2010/assets/summary.pdf]
The foregoing should make clear this borrower is in no position to bankroll its promises. Thus, it will either default on some obligations overtly (by not repaying borrowed amounts in full) or covertly (using inflation to monetize its debt, i.e., repaying borrowers in currency whose value has depreciated considerably). In either case, the borrowers get hosed.
Would any sane banker lend $19.7T to such a reckless borrower? This is the uncomfortable question the Chinese
have begun to ponder seriously.
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