Posted by: SWL | January 1, 2014

US Won’t Prosper in New Year

In the US we say “Happy New Year”. The translation of greetings in many other countries is “Congratulations on the New Year”. There are also a few countries where people greet each other with wishes for prosperity in the new year.

I’m glad I’m not in that last group because I do not want to say something I do not believe in. I don’t think most people I know will prosper in 2014. I think many Americans will just get by. Unfortunately, I believe that is mostly the fault of our government.

The Federal Reserve Board has forcibly kept interest rates low. That should have encouraged financial institutions to lend money to businesses to expand, but with other economic uncertainties that has not happened. The main result of low interest rates has been little or no growth in personal savings accounts. The Fed has also been pumping money into the economy. That has mostly benefited the stock market. Small investors have seen some gains, but corporations have been the primary beneficiaries as the value of the companies’ stocks rise.

The Obama administration has invested our tax dollars in “Stimulus”, but instead of projects that benefit the average citizen, funds went to green energy projects – most of which have failed. Courtesy of the taxpayers, General Motors was “saved”. I am glad auto workers could keep their jobs. But if they lost their jobs, they could probably find other work. The GM bailout stripped GM retirees of their pensions – how will they find other income? The government sold “our” stock in GM in two installments, both below the price originally paid. (Who picked that timing?)

Now we have to deal with the Affordable Care Act (aka “Obamacare”). People obtaining insurance through healthcare.gov face either large premiums with moderate deductibles or smaller premiums with huge deductibles. For relatively healthy families/individuals, the deductible will never be satisfied and they will get no benefits from their insurance. For most of us still on employer-provided plans, costs will be higher in 2014. On my family’s plan, for example, besides the annual increase in premium, our prescription drug co-pay will double.

I am tired of ACA supporters parroting that previously uninsured people will have better access to medical care. Yes, of course. But we could have taken care of them more easily and cheaply by simple legislation that expanded Medicaid eligibility. Just the costs of the dysfunctional ACA website, advertising, covering the extra costs to states for expanded Medicaid and multiple trips by the President took to promote ACA would probably have funded care for the previously uninsured for a year. Exclusions for pre-existing conditions could have been made illegal at no cost to taxpayers. And the rest of us could have kept the insurance and doctors we like.

There are easier ways than ACA to help low income and sick people get healthcare, if that had been the actual goal. But President Obama wants to phase-out the evil, profit-making insurance companies in the near future and eventually eliminate them entirely to create a government-run system.

So most of us will slog through 2014 paying higher prices for food, utilities, health insurance and healthcare, while our elected officials worry about the mid-term election. More Americans will lose their health insurance – and maybe their jobs – when the delayed employer mandate finally takes affect in fall. It would be good overall if the Federal Reserve gradually stops tinkering with the money supply, but in the short-term it might upset the financial markets. Wow, so much to look forward to!

I hope for the country’s sake that I am wrong. I hope that those of you reading this can find ways to thrive in spite of the state of the economy. My wish is that everyone is prosperous in 2014. I hope that despite the circumstances, everyone find the joyful things that do not cost money, so that Happy New Year will be a reality.

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