Share How Ironic That A Healthcare Bill Should Cripple The US
Mar 31st, 2010 | By Graham Sharkey | Category: Breaking News, Economy |
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Today the US secured itself a future consumed by hyperinflation which is going to be caused as a direct result of the healthcare bill which will raise interest payments.
Medicare was created in 1966 at a cost of $3 billion per year and the House Ways and Means Committee estimated in 1966 that in 1990 the cost of Medicare would reach $12 billion per year. Instead, the actual cost of Medicare in 1990 was $107 billion (792% more than what was projected) and today Medicare costs $408 billion annually. In 2003, the White House Office of Management and Budget estimated that the Iraq War would have a total cost of $50 to $60 billion. So far, we have already spent $713 billion on the Iraq War (over 1,000% more than what was projected).
The Congressional Budget Office is estimating that the healthcare bill will cost $940 billion over the next 10 years, but if history is any indication, the actual cost will likely be several trillion dollars. NIA believes the healthcare bill will be the final nail in the coffin of the U.S. economy and will just about guarantee that we will see hyperinflation by the year 2015.
The U.S. government last week reported a record monthly budget deficit for February 2010 of $220.9 billion. Total tax receipts for the month were only $107.5 billion compared to outlays of $328.4 billion. The total U.S. deficit for the first five months of fiscal year 2010 was $651.6 billion, with tax receipts of $800.5 billion and outlays of $1.45 trillion. The deficit was up 10.5% for the first five months of fiscal year 2010 over the same period in fiscal year 2009.
We are now at a point where if the U.S. government taxed Americans 100% of their income, the tax receipts generated would not be enough to balance the budget. Likewise, if the U.S. government cut 100% of its spending including defense, but kept paying Social Security, Medicare and Medicaid, we would still have a budget deficit. NIA believes it will be impossible for the U.S. to have a balanced budget ever again.
The U.S. national debt is now $12.67 trillion of which $8.061 trillion is public debt. Due to the Federal Reserve’s artificially low interest rates of 0% to 0.25%, interest payments on our national debt last month were only $16.9 billion, an interest rate of only 2.548% on our public debt. The reason for the spread between our 2.548% interest rate on the public debt and the federal funds rate of 0 to 0.25% is that a portion of our national debt is made up of long-term bonds at higher interest rates.
Our debt ceiling was recently raised to $14.3 trillion, which we are on track to reach in less than a year, sending our public debt up to about $10 trillion. If the Federal Reserve raises the federal funds rate up to just 2% during the next year, NIA believes the interest rate on our public debt could rise to 5% and our annual interest payments will likely rise to $500 billion or 23% of projected 2010 tax receipts of $2.165 trillion.
The White House is not projecting for interest payments on the national debt to break the $500 billion mark until fiscal year 2014. By then, even if we go by White House projections that the deficit will be cut to $828 billion in 2012, $727 billion in 2013 and $706 billion in 2014, in 2014 we will still be looking at a national debt of over $18.5 trillion with a public portion of around $13.14 trillion. We find it shocking that the White House is projecting an interest rate on our public debt in 2014 of only around 4%.
All of this means that the While House expects the Federal Reserve to leave interest rates at artificially low levels almost indefinitely. However, we know it will be impossible for them to do so without creating a huge outbreak of inflation in the prices of food, energy, clothing, and just about everything else Americans need to live and survive. In order to prevent hyperinflation, we need interest rates to be higher than the rate of inflation.
NIA believes the real rate of U.S. inflation to already be approximately 5%. If the Federal Reserve doesn’t raise the federal funds rate to above 5% in the short-term, in our opinion, an outbreak of double-digit inflation is inevitable. By 2014, it is possible the Federal Reserve will be forced to raise the federal funds rate up to above 10% and the public portion of our national debt could exceed $15 trillion. Therefore, in 2014 we could see the interest payments on our national debt reach $1.5 trillion, about triple what is currently being projected and 43% of the government’s projected tax receipts that year of $3.455 trillion.
Besides the cost of the healthcare bill and rising interest payments on our national debt, another major catalyst for hyperinflation will be social security payments, which adjust to the CPI-index. As the government’s CPI-index rises, so will the social security payments that it owes. This could cause a death-spiral in the U.S. dollar. Inflation is still the last thing on the minds of most Americans, but soon it will be their primary concern.
FACT – July of 2008 in Zimbabwe it cost 100 BILLION dollars to purchase THREEeggs, A taste of what is coming to the US? I think, yes!
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Doug,
I don’t take offence to your comments, so, thank you for being well mannered in your feedback, but calling the site misinformed was just a horrendous error, You have offered no comments on the actual content, I am studying a masters Economics and History at University so misinformed I am not.
Referring again to your comment on me being wrong about the price is also incorrect, if you read back to yourself “I literally just googled this and number one result ” just to emphasise how much information and reference there is out there that particular article says it is 35 per egg, 35×3 = 105 which if you knew about hyperinflation you would know that prices for products can change throughout the day http://www.reliefmine.com/articles/economy/215-one-hundred-billion-dollars there is another article.
In future (as I hoe you come back to this site) just ask for my references, Do not try and discredit me or the work of others, especially if you have nothing to counter argue it with.
Regards
You know guys, let me just say that please don’t take anything to heart. I was really just having some fun. I might find some of your opinions a bit “off”, but hey, that’s what free speech is all about, I really didn’t mean any harm. Heck, we need guys looking into conspiracies, making sure things are on the “up and up”. Hope I didn’t offend you guys, have a good evening.
I’m not offended, it’s all about sharing information. You obviously came here for a reason. Maybe you should spend some more time getting some opinion from non-mainstream sources and then make a decision based on both sides.
Actually I was commenting on the article, not the post. And using your source (thank you by the way, at least some of this information is sourced) I was able to find that the “fact” was indeed incorrect. It states that 1 egg was sold at 35 billion Zimbabwe dollars. At little different that what was stated in the above article. So the only bit of information that was sourced (only after it was requested) was incorrect. You both come off as a couple of very uninformed people who are extemely paranoid that the “New World Order” is coming to get you. Lay off the spy movies guys, you starting to sound like a joke.
so it was $5 billion more? Ohh whooops.
Look mate the main point of the article stands. Hyperinflation. This is an opinionated column not a scholarly work. Perhaps you’d like to give your educated opinion?
“You both come off as a couple of very uninformed people who are extemely paranoid that the “New World Order” is coming to get you. Lay off the spy movies guys, you starting to sound like a joke.”
Um what? Bit of a sweeping and ignorant statement there.
YOU come off as somebody that has had their belief system so rattled by the content of the site you want to fight back out of fear and denial. If you honestly believed in yourself, you wouldn’t be sticking around.
Have you not heard of the hyper inflationary period in the Wiemer Republic? Shame on you for commenting so hastily on this post with no previous knowledge on the subject, Infact in that era in Germany it cost 21,5000,000 marks to post a letter. FACT
As for the referencing, I literally just googled this and number one result http://network.nationalpost.com/np/blogs/fpposted/archive/2008/07/22/cost-of-an-egg-in-zimbabwe-35-billion.aspx
I can forgive your ignorance on this one occasion as it is a touchy subject for some, but please do not try to disprove facts again young squire.
Graham Sharkey
Ah, a little paranoid I see. Why not list your references, it might make your site slightly more believable. Who paid 100 billion dollars for 3 eggs? Where in Zimbabwe was it? None of your “facts” are ever supported. No one will take you seriously if you continue to write in this manner.
It’s called hyperinflation Doug, it happened in Germany once?