Lane 3

The Real Motive for the Public Option?

Do you get a sense that President Obama and the Democrats are truly desperate to produce a plan that leads to single-payer? On August 20th, Speaker Pelosi said, “There’s no way I can pass a bill in the House of Representatives without a public option.” Does this remind you of California on May 19th?

Take the time to read and comprehend Jeffrey Rogers Hummel’s article, Why Default on U.S. Treasuries is Likely and you will come to understand the motivation that will drive politics over the next several years. Hummel describes two firewalls separating us from default:

• The first is the trust funds of Medicare and Social Security. Tax income into these two programs is expected to be outstripped by claims in 2017 and 2037, respectfully. Once this happens the Fed will have to dip into general revenue – thus depriving politicians the largess they are famous for tossing about. And, if investors in U.S. Treasuries sense weakness they will demand a risk premium. If this happens Hummel then considers a collapse similar to that of the Soviet Union a possible scenario.




• The second firewall involves hyperinflation and is a resulting choice between preserving the value of the dollar and defaulting on the debt. Hummel predicts that the Feds would choose to save the value of the dollar and would therefore default.

Why is a single-payer plan sacrosanct to liberals? Single-payer provides a form of dollar cost averaging whereby the unprofitable Medicare / Medicaid plans absorb the profitable private sector plans thus affording the financial cushion the Feds so desperately need.

Hummel concludes with:

What will ultimately kill the welfare State is that its centerpiece, government-provided social insurance, is simultaneously above reproach and beyond salvation. Fully-funded systems could have survived, but politicians had little incentive to enact them, and much less incentive to impose the huge costs of converting from pay-as-you-go. Whether this inevitable collapse of social democracies will ultimately be a good or bad thing depends on what replaces them.

Who holds the almost $12 trillion in US debt? $4.3 trillion is held by the US government. $4 trillion is held by the public (individuals, corporations, state or local governments) and $3.3 trillion is held by foreigners.

So, in the end, may the desperate motivation to enact ObamaCare really be to placate these debt holders? Said another way, is providing coverage to 47 million uninsured the goal or the excuse? What do you think?