Ambrose Evans-Pritchard suggests that a recession might be on the horizon again and Fed decisions are critical: “The risk of a US recession next year is rising fast. The Federal Reserve has no margin for error.
Liquidity is suddenly drying up. Early warning indicators from US ‘flow of funds’ data point to an incipent squeeze, the long-feared capitulation after five successive quarters of declining corporate profits.
Yet the Fed is methodically draining money through ‘reverse repos’ regardless. It has set the course for a rise in interest rates in December and seems to be on automatic pilot.
“We are seeing a serious deterioration on a monthly basis,” said Michael Howell from CrossBorder Capital, specialists in global liquidity. The signals lead the economic cycle by six to nine months.
“We think the US is heading for recession by the Spring of 2017. It is absolutely bonkers for the Fed to even think about raising rates right now,” he said.
The growth rate of nominal GDP – a pure measure of the economy – has been in an unbroken fall since the start of the year, falling from 4.2pc to 2.5pc. It is close to stall speed, flirting with levels that have invariably led to recessions in the post-War era.
“It is a little scary. When nominal GDP slows like that, you can be sure that financial stress will follow. Monetary policy is too tight and the slightest shock will tip the US into recession,” said Lars Christensen, from Markets and Money Advisory.
If allowed to happen, it will be a deeply frightening experience, rocking the global system to its foundations. The Bank for International Settlements estimates that 60pc of the world economy is locked into the US currency system, and that debts denominated in dollars outside US jurisdiction have ballooned to $9.8 trillion.
The world has never before been so leveraged to dollar borrowing costs. BIS data show that debt ratios in both rich countries and emerging markets are roughly 35 percentage points of GDP higher than they were at the onset of the Lehman crisis.
This time China cannot come to the rescue. Beijing has already pushed credit beyond safe limits to almost $30 trillion. Fitch Ratings suspects that bad loans in the Chinese banking system are ten times the official claim.
The current arguments over Brexit would seem irrelevant in such circumstances, both because the City would be drawn into the flames and because the eurozone would face its own a shattering ordeal. Even a hint of coming trauma would detonate a crisis in Italy.
To be clear, the eight-year old US cycle has not yet rolled over definitively. The picture remains fluid, hard to read in a world where key signals have been distorted by central bank repression. The third quarter will almost certainly look a little better.
“We are getting closer and closer to a recession, but we are not quite there yet, looking at our forward-indicators,” said Lakshman Achuthan from the Economic Cycle Research Institute in New York.
“I can understand why people are getting worried. We have been seeing a ‘growth-rate’ cyclical downturn for the last two years. The longer this goes on, the less wiggle room there is,” he said.
“We are sure there will be no recession this year or into the first two months of 2017, but beyond that there are worrying signs. The deterioration of our leading labour market index is very clear,” he said.
Mr Achuthan thinks it is still possible that US growth will pick up again for another short burst – lifted by a global industrial rebound of sorts – before the storm finally hits.
That was broadly my view earlier this year as the global money supply surged and a string of governments seized on Brexit to crank up stimulus, but what is striking is how little traction it has achieved.
The velocity of M1 money in the US has continued to slow, hitting 40-year low of 5.75 over the summer, and markets are only just awakening to the unsettling thought that China’s latest boomlet has already topped out. Beijing is having to hit the brakes again.
Crossborder said new rules for money market funds that came into force this month have complicated the picture, causing the stock of US commercial paper to shrivel by $200bn. Yet there are ways to filter out some of these effects.
The plain fact is that 3-month lending rates in the off-shore ‘eurodollar’ markets in London have tripled since July to 0.93pc, sharply tightening conditions for global finance. Investors may have been too complacent in discounting these gyrations as part of a regulatory hiccup when something more sinister is emerging.
CrossBorder’s liquidity measure for the US is now at levels comparable to the inflection point a few months before the US recessions of 1990 and 2001, and before the recession starting in November 2007 – and a whole year before Lehman Bank collapsed, nota bene.
Albert Edwards from Societe Generale says gross domestic income (GDI) was the most accurate gauge of the economy as the pre-Lehman crisis unfolded, and this measure has been flat for the last two quarters.
“The pronounced weakness of GDI relative to GDP might be an ominous omen, for it may well be indicating that a US recession is already underway – just as it was in 2007,” he said.
It is certainly odd that the Fed should tighten into these conditions. The unemployment rate has risen to 5pc after bottoming at 4.7pc in May, and small business (NFIB) hiring plans have been flashing soft warnings for months.
“The Fed wants to get ahead of the recovery, and unless this is checked, it will lead to recession,” said David Beckworth, a monetary economist at George Mason University.
Prof Beckwith said the US economy is still reeling from the shock of a 20pc rise in dollar’s trade-weighted index since mid-2014. This in turn is squeezing the world’s ‘shadow-dollar’ nexus.
The Fed faces horrible choices, of course. The longer it delays rate rises, the longer it perpetuates the deformed asset-bubble economy that so disfigures modern polities, and the louder the rebukes from Congress.
Critics are quick to note that price pressures are building, or at least appear to be. The Atlanta Fed’s index of 12-month ‘sticky price‘ inflation has reached 2.6pc, higher than nominal GDP growth itself. Call it ‘stagflation’ or the misery mix.
Yet you can pick your inflation measure to tell any story. The Dallas Fed’s trimmed-mean PCE – supposed to eliminate noise – actually peaked in June and has since been slowing on a six-month basis.
And it is – or should be – a cardinal rule of central banking that you never raise rates in response to rising energy costs. Oil spikes are not in themselves inflationary. They are neutral.
The truth is that nobody knows whether this is the start of a sustained reflation cycle, or just the last feeble flicker before America, Europe, and East Asia are swallowed into a deflationary vortex, the frozen circle from which there is no easy exit – ‘lasciate ogni speranza, voi ch’entrate’.
What we do know is that the Fed cannot afford to get this wrong, as it did with such calamitous consequences from March to August 2008, when it talked tough on an inflationary danger that had already peaked and passed, tightening policy into the hurricane.
As we now know – and some warned at the time – the US economy had already buckled. The result of Fed sabre-rattling in those crucial months was the collapse of Fannie Mae, Freddie, Lehman, and the Western banking system.
Stanley Fischer, the Fed’s vice-chairman, conceded in a grim speech this week that the Fed has now run out of ammunition and that this “could therefore lead to longer and deeper recessions when the economy is hit by negative shocks.”
His prescription is to try sneak in a few rate hikes while it is still possible to create a buffer. Market monetarists say this is profoundly ill-advised, and may instead bring about exactly what he fears.
A President Hillary Clinton could and certainly would flood the economy with fiscal stimulus if need be. Yet this takes time. There are few ‘shovel-ready’ projects, and Washington is a fractious place. She may face a hostile House. The monetary crunch would have crystallized long before anything fiscal could be done.
The world will not end if premature tightening pushes the US into recession next year. But why court fate?
“A growing number of people in Obamacare are finding out their health insurance plans will disappear from the program next year, forcing them to find new coverage even as options shrink and prices rise.
At least 1.4 million people in 32 states will lose the Obamacare plan they have now, according to state officials contacted by Bloomberg. That’s largely caused by Aetna Inc., UnitedHealth Group Inc. and some state or regional insurers quitting the law’s markets for individual coverage.
Sign-ups for Obamacare coverage begin next month. Fallout from the quitting insurers has emerged as the latest threat to the law, which is also a major focal point in the U.S. presidential election. While it’s not clear what all the consequences of the departing insurers will be, interviews with regulators and insurance customers suggest that plans will be fewer and more expensive, and may not include the same doctors and hospitals.
It may also mean that instead of growing in 2017, Obamacare could shrink. As of March 31, the law covered 11.1 million people; an Oct. 13 S&P Global Ratings report predicted that enrollment next year will range from an 8 percent decline to a 4 percent gain.”
To see Obamacare enrollment shrink this coming year would be another devastating blow to the already fiscally precarious situation. Enrollment is not nearly what was predicted in 2010 when the law passed — and the program needs — to stay afloat. Obamacare is certain to receive an overhaul next year, but what kind of reform will depend largely on who is in charge of the White House and Congress.
The long-forgotten IRS scandal has continued to limp along largely unnoticed. Unfortunately, the IRS has not entirely curbed its behavior of discrimination, despite assurances. Some tea party groups still have not had their applications approved; the longest seems to be nearly seven years (Dec. 2009). And that’s not all.
Incredibly instead of finishing the process, more questions and information has been requested in some instances. Yet even more incredulously, the “IRS has taken the unprecedented step of publicly filing actual return information,” putting taxpayer return information in the public realm; it released on of the sets of questions it sent to a tea party group in Texas. Here’s more:
“The IRS has taken the unprecedented step of publicly filing actual return information,” said Edward Greim, who is handling the case on behalf of more than 400 groups targeted by the IRS.
Still, the move to release the information has inflamed an already tense class action legal battle between the IRS and tea party groups who feel the agency is still targeting them more than three years after it promised to cease.
Mr. Greim said releasing the letter is proof that the IRS can’t be trusted to fairly handle the cases.
“The IRS‘ conscious decision to attach this Section 6103-protected request to a public filing makes it even harder to believe that the IRS can treat TPTP and similar groups fairly and neutrally. This is, and will continue to be, a core focus of our litigation in the coming weeks,” he said.
Both the IRS and officials at the Justice Department, which is acting as the tax agency’s lawyer, declined to comment, citing the ongoing legal battle.
But the tax agency said in court papers that Mr. Greim has been misleading the court, and said the documents were designed to prove that the IRS has been dealing fairly with the TPTP. The IRS said the information it requested focuses on the tea party group’s activities and whether they would be illegal for a tax-exempt group to engage in.
“It is more of the same: spurious attacks on the IRS and mischaracterizations of the facts,” the Justice Department said in its briefs.
The IRS admitted in 2013 that it singled tea party groups out for intrusive scrutiny, including crossing lines by asking questions about the groups’ associations, meetings and even members’ reading habits. Some groups received multiple letters, each time further delaying their applications.
After being dinged by its inspector general, the agency promised it would stop asking inappropriate questions, and insisted it canceled the use of secret targeting lists to single out groups.
But a federal appeals court this summer ruled that as long as some groups are still stuck in the backlog, the IRS is still conducting illegal targeting.
The tax agency, which had been blocking processing, claiming it couldn’t do anything while the court cases were proceeding, quickly kicked into gear and announced they would process the three remaining cases.
In a letter last week to the TPTP, the IRS fired off a new set of questions — the fourth inquiry the group has received since it applied for nonprofit status in 2012. In the new questions, IRS agent Jerry Fierro said he looked over the group’s website and spotted potential trouble spots, including “rallies, parades, educational workshops, speaking events, voter registration drives, fund raisers and straw polls.”
The IRS says those activities could squelch a group’s application.
Mr. Greim, the lawyer for the TPTP, said in making its letter public, the IRS was showing how aggressive its tactics are toward tea party groups. He said the agency, which has held up the TPTP’s application for 41 months, only gave the organization 30 days to respond, and said if the questions aren’t all answered, it could derail the application again.
“The IRS‘ conscious decision to attach this Section 6103-protected request to a public filing makes it even harder to believe that the IRS can treat TPTP and similar groups fairly and neutrally,” Mr. Greim said.
Section 6013 of the tax code prohibits sharing of information from taxpayers’ returns.
Tax experts said the IRS letter is likely considered protected information, but they said the IRS is probably on safe legal ground because the law allows for information to be filed if the taxpayer is a party in a lawsuit and the filing directly relates to an issue in the case.
In addition to the TPTP, two other tea party groups that were targeted by the IRS are still awaiting approval. Unite in Action, a Michigan-based group, applied in 2010, and the Albuquerque Tea Party applied nearly seven years ago, in December 2009.
Jay Sekulow, chief counsel at the American Center for Law and Justice, which represents the other two groups, said they have not received a new set of questions similar to the list sent to the TPTP. But he said he’s been prodding the
IRS for a final decision.
“We again demanded that they review their applications and process them in a fair and expeditious manner,” he said in a statement.
The New York Times has admitted the failures of Obamacare: loss of insurers in many marketplaces, high premium costs, the collapse of many co-ops, overreaching federal mandates, and more. The Times suggests that change is necessary in order to ensure Obamacare’s survival, but seems to endorse even more government participation, not less.
There is a renewed push for a public option. One of the more ridiculous justifications from the article comes from the charge that “private insurance companies could not be trusted to provide reliable coverage or control costs” and that “the shrinking number of health insurers is proof that these warnings were spot on.” To suggest that it is the collapse of many markets is the fault of the insurance companies themselves is absolutely ridiculous.
And another laughable observation on the structural and technical problems of Obamacare: “The subsidies were not generous enough. The penalties for not getting insurance were not stiff enough. And we don’t have enough young healthy people in the exchanges,” essentially blaming everyone else for the failures. The insurance companies didn’t offer cheaper enough plans. The taxpayer didn’t pay enough in penalties/fines/taxes. Too many sick people and too few healthy people enrolled. The solution: offer more government money, paid for by extracting more penalties/fines/taxes for those who chose not to purchase insurance, and spend more money trying to convince more healthy people to buy trust Obamacare and buy into the exchanges. You can’t make this up.
What’s more, many of the same champions of Obamacare are not calling for even more drastic, government-centered, expensive alternatives. “On Sept. 15, Senator Jeff Merkley, Democrat of Oregon, introduced a resolution calling for a public option. The measure now has 32 co-sponsors, including the top Senate Democrats: Harry Reid of Nevada, Chuck Schumer of New York and Richard J. Durbin of Illinois.”
The public option could take a couple of different forms. One would be a government sponsored health plan available as an option in every market. The other option would be that a single payer option, championed by Sanders, which would be essentially Medicare for all. Unfortunately, such ideas would only compound the problem, which, as its root, is money.
Any public option would drive up medical costs, and Obamacare now is financially unsustainable. A government sponsored plan “would have an unfair advantage if it both regulates and competes with private plans,” while a single-payer plan would be even more egregiously expensive as it would shoulder the costs for everything.
While completely repealing Obamacare is probably not a viable solution or possibility anymore, other changes such as making insurance portable across state lines, widening the use and availability of health savings account should also be explored, not shunned. Merely throwing more money after bad money will only worsen Obamacare for everyone.
A couple of days ago, I wrote about my theory that as long as the interest rates stay low, the stock market will remain high — because no one has any other place for investment. The rates have stay historically low for nearly a decade now, so investors have seen little-to-no return in many usual places.
Just today, we hear the the Fed has rejected yet another rate hike, and furthermore, has “downgraded its forecast for economic growth in 2016 for the third time this year. It now projects growth this year to be 1.8%. In June it forecast growth of 2%.
As the Fed has hesitated to raise rates, there is a growing debate about its credibility. Many economists and investors say the Fed’s hesitancy to raise rates — and conflicting messages from its top leaders — has eroded public confidence in the central bank.”
It is unlikely that a rate hike will happen on November 1-2, so close to the election. If a rate hike is to happen, it would be more likely to be in mid-December. It will be interesting to see how both the markets, and the Fed, react to the outcome of the November elections.
Did you even notice that whenever the economy issues bad results (a weak jobs report, etc.), the stock market goes UP? Logic would seemingly have it be the opposite. If the economy was weak, one would assume the stock market would respond negatively. But that’s not really the case.
For years, I couldn’t understand it — how stupid could the market be? Why would the market do well? And why is it so important for interest rates to stay low? I think I have figured it out. Low rates are not good for the economy, but they ARE good for the stock market. See, the stock market and economy are not necessarily affected the same way. When rates stay low, investors have to put their money in the stock market because there is no alternative.
Think about it — with non-existent interest rates, you don’t get an return on investment (ROI) anywhere. People have no alternative avenues for investing their money except to put it in the stock market. So even though this economy is performing very sluggishly, the Feds can point to the strong market as evidence that their policies are succeeding, because most people consider the economy and stock market to be fairly synonymous with each other — but they are not.
The economy is still underperforming because of so many terrible policies: over-regulation, increased business fines, higher taxes, Obamacare, Dodd-Frank — these are all major reasons why businesses are struggling, but that doesn’t necessarily affect the stock market; that’s why the stock market doesn’t react the same way when business data is terrible.
Keeping interest rates low is not helping the economy at all — but it does help the stock market, which mask the inherent policy problems. Virtually every part of Hillary’s economic plans are terrible, for the economy, jobs, etc. The economy will never really recover until the systemic problems are fixed.
We’ve all seen the video which raises new questions about the health status of Hillary Clinton. I’ve largely left these questions alone because I try to avoid reckless speculation. However, the video does raise some new questions:
The Hillary press team was largely silent for 90 minutes after the video. Later, it emerged that Hillary was diagnosed with pneumonia on Friday. “But just after 5 p.m., a campaign official said Mrs. Clinton’s physician, Dr. Lisa R. Bardack, had examined the candidate at her home in Chappaqua, and Dr. Bardack said in a statement that Mrs. Clinton was “rehydrated and recovering nicely.”
“Secretary Clinton has been experiencing a cough related to allergies,” Dr. Bardack’s statement said, adding that on Friday morning, after a prolonged cough, Mrs. Clinton was given a diagnosis of pneumonia. “She was put on antibiotics, and advised to rest and modify her schedule,” Dr. Bardack added. “At this morning’s event, she became overheated and dehydrated.”
Now, if she was indeed diagnosed with pnuemonia, why was she subsequently at a fundraiser with Barbra Streisand later that same evening? This is the same incident that Hillary used the now famous term “basket of deplorables” in reference to Trump supporters.
According to reports on the event, “tickets for the gala start at $1,200, with limited availability, and go as high as $250,000. Donors who raise six figures get a meet-and-greet reception with Clinton.”
Does this mean that Clinton engaged in a private meet-and-greet while sick with pneumonia, and didn’t disclose her illness? Was she contagious then? How does one get told to “rest and modify her schedule” and then proceed to a high dollar fundraiser.
At some point during the day on Friday, Clinton also “appeared Friday at a national security briefing.” According to Politico’s description of the meeting published the day prior (Thursday),
“Hillary Clinton will meet with a bipartisan group of former national security officials on Friday, a group that includes ousted former CIA Director David Petraeus and former George W. Bush Homeland Security chief Michael Chertoff.”
According to a tweet by MSNBC captured by The Gateway Pundit that Friday, at 5:13pm in New York, MSNBC urged its followers to “Watch Live: Tune in to @MSNBC to watch Hillary Clinton speak after attending a major national security meeting.”
Watch Live: Tune in to @MSNBC to watch Hillary Clinton speak after attending a major national security meeting. pic.twitter.com/RzX9YRiWs4
— MSNBC (@MSNBC) September 9, 2016
This briefing was post-meeting, and pre-fundraiser. Did she notify any of the distinguished guests at the meeting that she was sick with pneumonia? The press at the briefing? Anyone she may have come in contact with? If not, why not?
She’s either lying about actually having pneumonia or she’s did not disclose a serious, and potentially contagious illness with the hundreds of people with whom she came in contact on Friday: national security folks, press, donors, supporters. Which one is more deplorable?
Data compiled by the Bureau of Labor Statistics show that government employees in the United States outnumber manufacturing employees by 9,932,000, according to data released today. CNS news has the highlights:
Federal, state and local government employed 22,213,000 people in August, while the manufacturing sector employed 12,281,000.
The BLS has published seasonally-adjusted month-by-month employment data for both government and manufacturing going back to 1939. For half a century—from January 1939 through July 1989—manufacturing employment always exceeded government employment in the United States, according to these numbers.
Then, in August 1989, the seasonally-adjusted employment numbers for government exceeded the employment numbers for manufacturing for the first time. That month, manufacturing employed 17,964,000 and government employed 17,989,000.
Manufacturing employment in the United States had peaked a decade before that in June 1979 at 19,553,000
From August 2015 to August 2016 seasonally-adjusted manufacturing employment declined by 37,000–dropping from 12,318,000 last August to 12,281,000 this August.
The 22,213,000 government employees in August, according to the BLS, included 2,790,000 federal employees, 5,120,000 state government employees, and 14,303,000 local government employees.
My good friend Don Boudreaux recently wondered aloud about the possibility of a Trump presidency, where he writes,
“I can understand and appreciate why some people believe that Donald Trump would be a less-dangerous president than would Hillary Clinton. (Although I no longer hold that view, I once did. And I concede that my current reckoning of the relative risks might be mistaken.) But I cannot understand why any sensible person believes that a Pres. Trump would serve any good purpose (beyond a Pres. Trump preventing there being a Pres. H. Clinton). I cannot understand why any sensible person thinks that a Pres. Trump will diminish rent-seeking and otherwise make the U.S. government less hostile than it currently is to Americans’ freedoms and prosperity.
Pres. Trump’s politically incorrect harrumphing and mad verbal ejaculations will no doubt give heartburn to “Progressive” academics with offices on the Charles and to “Progressive” editorialists with offices in Manhattan. But so what? Is a man such as Trump – a man so ignorant of civics, so boastfully boorish, so openly contemptuous of the rule of law, so flamingly ignorant of economics, so nastily bullying, so full of nativist fallacies, so fond of (and skilled at) rousing the rabble, and so megalomaniacal – likely to be someone who does positive good does not do great harm? Uh-uh.”
On the other hand, one could argue that the most important reason to vote for Trump is a chance to not screw up the Supreme Court for generations.
If Hillary wins and brings a Democrat Congress, we are in a Socialist regulatory state. If Trump wins, with a Republican Congress, the Congress will not pass any of his agenda.
This is an excellent editorial piece from the Wall Street Journal discussing the surprise announcement that Aetna, one of the leading insurers in this country, was withdrawing from the vast majority of Obamacare exchanges. But instead of sitting up and seriously considering this massive defection as a wake-up call (unlike all the previous failures), the Democrats want to blame Aetna itself in order to safeguard the narrative that Obamacare is working perfectly well. I have reproduced the piece in its entirety below; it’s worth the read.
“Democrats claimed for years that ObamaCare is working splendidly, though anybody acquainted with reality could see the entitlement is dysfunctional. Now as the law breaks down in an election year, they’ve decided to blame private insurers for their own failures.
Their target this week is Aetna, which has announced it is withdrawing two-thirds of its ObamaCare coverage, pulling out of 536 of 778 counties where it does business. The third-largest U.S. insurer has lost about $430 million on the exchanges since 2014, and this carnage is typical. More than 40 other companies are also fleeing ObamaCare.
The mass exodus will leave consumers consigned to the exchanges with surging premiums and fewer options, but don’t mention these victims to Democrats. They’re trying to change the subject by claiming Aetna is retaliating because the Justice Department is trying to block Aetna’s $37 billion acquisition of Humana.
The 2010 ObamaCare law makes it nearly impossible for non-mega insurers to operate, and a tide of regulations has encouraged consolidation. Aetna says the Humana tie-up will create economies of scale that could sustain the money-losing exchange policies.
But Massachusetts Senator Elizabeth Warren is now emoting on Facebook that “The health of the American people should not be used as bargaining chips to force the government to bend to one giant company’s will.” This week the Administration also released a July 5 letter from Aetna in response to a Freedom of Information Act request. Democrats claim the document shows CEO Mark Bertolini conditioning Aetna’s ObamaCare cooperation on merger approval.
This is some gall. Aetna was answering a June 28 “civil investigative demand,” in which Justice’s antitrust division specifically asked how blocking the merger would “affect Aetna’s business strategy and operations, including Aetna’s participation of the public exchanges related to the Affordable Care Act.”
Soliciting sensitive internal information that Aetna is legally compelled to provide—and then making it public to sandbag the company—is the behavior of political plumbers, not allegedly impartial technocrats. If police tried this, it’d be entrapment.
Mr. Bertolini had merely replied that the legal costs of an antitrust suit would strain Aetna’s performance. The insurer would have “no choice but to take actions to steward its financial health” and “face market realities,” such as reducing unprofitable business. Public companies have a responsibility to shareholders, and the wonder is that any insurer is still part of the exchanges.
ObamaCare’s troubles aren’t the result of any business decision. The entire industry is caught in the law’s structural undertow. Despite subsidies, overall enrollment is flat, there’s too much monthly churn, and the exchanges aren’t attracting enough healthy people to make the economics work.
Blame the law’s architects, not Mr. Bertolini, who must wonder what happened to the political goodwill he has tried to bank over the years. Aetna was inclined to accept the exchanges as loss leaders to support ObamaCare’s mission of universal coverage. The company led ObamaCare’s industry pep squad in 2009 and 2010.
The calculation then was that subsidies would open a new market, and consumers would be mandated to buy their products. But in the final frenzy to pass the law, Democrats decided that insurers made too much money and they imposed price controls on profit margins. Now insurers are accused of declining to throw away more money.
The ObamaCare implosion means that about a quarter of U.S. counties will have only one or two plans, and in some zero. Areas in Arizona, North Carolina, Pennsylvania and Texas seem to be hardest hit, though the extent of the damage is still emerging.
Democrats figure they have insurers over a barrel because a Hillary Clinton Presidency is coming. She’s running on higher subsidies for beneficiaries, a taxpayer bailout for the industry, and a “public option” akin to Medicare for the middle class. In health care the solution to a problem caused by government is always more government, which will create new problems and beget more government.
Republicans have no obligation to participate. They had no hand in creating this mess and they’ve been mocked by Democrats and the media for years for warning about ObamaCare’s flaws and trying to repeal and replace the law. Assuming the GOP holds at least the House, they should insist that any “fixes”—which are fast becoming inevitable—create a rational health-care market. Democrats deserve to be held accountable for the collapse of their ideas.”