Let's start off with what happens when you impose new overhead costs on industry ...
The ObamaCare Writedowns
The corporate damage rolls in, and Democrats are shocked!
Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare. We and others warned this would lead to AT&T-like results, but like so many other ObamaCare objections Democrats waved them off as self-serving or "political."
...On top of AT&T's $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks.
This is just the beginning of the damage done to American businesses by the massive cost mandates imposed by Obamacare. The sad thing is that we could have accomplished a LOT more in the way of real reform by simply extending full health insurance deductibility to individuals and reporting premiums paid by their employers as income to be netted against said deductions, while IMPROVING corporate viability. Naturally, Obamacare minions in Congress are doing their best to blame business for doing exactly what Congress has just ordered them to do:
Meanwhile, Henry Waxman and House Democrats announced yesterday that they will haul these companies in for an April 21 hearing because their judgment "appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs."
In other words, shoot the messenger. Black-letter financial accounting rules require that corporations immediately restate their earnings to reflect the present value of their long-term health liabilities, including a higher tax burden. Should these companies have played chicken with the Securities and Exchange Commission to avoid this politically inconvenient reality? Democrats don't like what their bill is doing in the real world, so they now want to intimidate CEOs into keeping quiet.
Even if they succeed in further demonizing and silencing corporate America, it won't stop the economic damage in the slightest. Reality 1, Fairy Dust 0.
Then, of course, there's the obvious real-world response to legislation doomed to explode government deficit spending at a time when our finances are already strained:
Sell-off in US Treasuries raises sovereign debt fears
The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis. Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be "the canary in the coal mine", a warning to Washington that it can no longer borrow with impunity. He said there is a "huge overhang of federal debt, which we have never seen before".
This is a considerable worsening of Treasury-sale prospects since the already-alarming December report. Gee, I wonder what happened between now and then to boost fears of unmanageable US sovereign debt? Oh yeah. Reality 2, Magic Wand 0.
Lastly, some further inevitability that I have pointed out over and over and over again over the last several years:
Health overhaul likely to strain doctor shortage
Primary care physicians already are in short supply in parts of the country, and the landmark health overhaul that will bring them millions more newly insured patients in the next few years promises extra strain.
The new law goes beyond offering coverage to the uninsured, with steps to improve the quality of care for the average person and help keep us well instead of today's seek-care-after-you're-sick culture. To benefit, you'll need a regular health provider.
Yet recently published reports predict a shortfall of roughly 40,000 primary care doctors over the next decade, a field losing out to the better pay, better hours and higher profile of many other specialties.
Well, DUH! Ya think? When you start out with a shortage, one largely caused by major structural disincentives such as doctors leaving medical school with six-figure student loan debt and having to choose between low-paying primary-care and high-paying specialties, it's gonna take more to fix than a few tossed scraps and boiled-out bones. But that's all that's offered as primary-care inducements, a few scraps, such as a 10% boost to PCP's in Medicare reimbursements. Reimbursement rates that are already largely "non-profit." We've seen this show before, in Massachussets:
Massachusetts offers a snapshot of how giving more people insurance naturally drives demand. The Massachusetts Medical Society last fall reported just over half of internists and 40 percent of family and general practitioners weren't accepting new patients, an increase in recent years as the state implemented nearly universal coverage.
That's for new patients period. Acceptance rates for Medicare/Medicaid patients are far lower. Reality 3, Flying Unicorn Sparkly Rainbow Farts 0.
Watching this predictable and predicted train wreck of authoritarian central planning is like watching someone on the short stack in the SCOOP poker tournament play increasingly lousy hands in a desparate attempt to Win the Big One. A miracle salvation is possible, but the odds are so long against that "miracle salvation" is the precisely appropriate phrase. Far more likely is a bust-out, and sooner rather than later, long before the final table.
This is just Week One of Obamacare. Hang on, it's gonna be a long ride.