Exchequer

The Bond Market vs. Obamacare

So, it turns out the people who handle federal debt for a living do not believe the persistently repeated claim that Obamacare actually would reduce the national debt:

Treasuries rose, pushing 10-year note yields down from a six-month high, as a federal judge ruled against the U.S. health-care overhaul, easing concern that the government will struggle to contain record deficits.

Bonds also advanced as less U.S. debt was submitted to the Federal Reserve in its buyback today. Treasuries dropped earlier on speculation Congress will support economic growth by passing President Barack Obama’s agreement to extend tax cuts.

“The latest bump-up in Treasuries comes from the ruling about Obama’s health-care being unconstitutional,” said Larry Milstein, managing director of government and agency debt trading in New York at R.W. Pressprich & Co., a fixed-income broker and dealer for institutional investors. “If we are not going to be spending a trillion dollars over the next 10 years it’s a significant reduction in deficit spending, which means less debt being issued.”

But getting rid of the mandate does not get rid of Obamacare in toto, and, in fact, it makes the economics of it even worse: As things stand, insurance companies still will be required to cover those with pre-existing conditions, and now nobody has an incentive to buy insurance before he gets sick.

Two obvious options if the mandate stays thrown out: One is that Congress decides to keep all or most of the rest of Obamacare, replacing the individual mandate with gigantic subsidies to the insurance companies to offset costs associated with the pre-existing conditions rule. There are many insurance companies that probably would be happy with that arrangement, if the subsidies are fat enough. The other option is a more or less complete repeal –  which is the better option, and therefore the less likely to happen.

Most Popular

PC Culture

Hate-Crime Hoaxes Reflect America’s Sickness

On January 29, tabloid news site TMZ broke the shocking story that Jussie Smollett, a gay black entertainer and progressive activist, had been viciously attacked in Chicago. Two racist white men had fractured his rib, poured bleach on him, and tied a noose around his neck. As they were leaving, they shouted ... Read More
Politics & Policy

The Strange Paradoxes of Our Age

Modern prophets often say one thing and do another. Worse, they often advocate in the abstract as a way of justifying their doing the opposite in the concrete. The result is that contemporary culture abounds with the inexplicable — mostly because modern progressivism makes all sorts of race, class, and ... Read More
PC Culture

Fake Newspeople

This week, the story of the Jussie Smollett hoax gripped the national media. The story, for those who missed it, went something like this: The Empire actor, who is both black and gay, stated that on a freezing January night in Chicago, in the middle of the polar vortex, he went to a local Subway store to buy a ... Read More
World

Ilhan Omar’s Big Lie

In a viral exchange at a congressional hearing last week, the new congresswoman from Minnesota, Ilhan Omar, who is quickly establishing herself as the most reprehensible member of the House Democratic freshman class despite stiff competition, launched into Elliott Abrams. She accused the former Reagan official ... Read More
U.S.

White Progressives Are Polarizing America

To understand how far left (and how quickly) the Democratic party has moved, let’s cycle back a very short 20 years. If 1998 Bill Clinton ran in the Democratic primary today, he’d be instantaneously labeled a far-right bigot. His support for the Religious Freedom Restoration Act, the Defense of Marriage Act, ... Read More
Elections

One Last Grift for Bernie Sanders

Bernie Sanders, the antique Brooklyn socialist who represents Vermont in the Senate, is not quite ready to retire to his lakeside dacha and so once again is running for the presidential nomination of a party to which he does not belong with an agenda about which he cannot be quite entirely ... Read More
PC Culture

Merciless Sympathy

Jussie Smollett’s phony hate-crime story could have been taken apart in 24 hours, except for one thing: Nobody wanted to be the first to call bullsh**. Who will bell the cat? Not the police, and I don’t blame them. Smollett is a vocal critic of President Donald Trump who checks two protected-category ... Read More