The election is over and some people want to brag about Obama having a second term.  I obviously did not support Obama in his first term and did not vote for his second term.  It is easy to ask what he did during his first term to earn a second term.  It is difficult to hold your breath waiting for an answer to arrive.  Obama and his Democrat Party supporters in the House and Senate passed the Affordable Healthcare Act. Unfortunately, it turns out we can’t afford.  Obama has watched over the slowest recovery of any recession since WWII.  Not much to brag about.

We are now going to be treated to the implementation period of the Affordable Healthcare Act and a number of other Obama initiatives. These initiatives are intended to payoff the extreme left and to fulfill Obama’s desire to socialize America.  The Obama argument about the fiscal cliff has nothing to do with improving the American economy it is intended to expand the government dependency of American citizens.  Just as each of us can’t borrow our way into prosperity, neither can the United States government.  We are trillions of dollars in debt and going deeper into debt every day.  The tax money that Obama demands from the “wealthy” will not cover even a few days spending at current levels.

Spending reductions will be promised but will never fulfilled.  They never are.  The games that were played with the budgeting for the Affordable Healthcare Act guarantee that our rate of debt acquisition will increase.  Because of the unfunded subsidies required to support the state insurance exchanges, most states are choosing not to participate in the program.  Many small to medium businesses are choosing to cut back on hours for employee rather than provide insurance.  These employment trends will reduce private sector support and increase the funding needed for the Affordable Healthcare program.  

Although the implicit promise from Obama to the American public has been that taxes on the middle class would not increase the reality is that they will increase dramatically.  We will see significant increases in the cost of healthcare because of the Obama Care.  Energy costs will continue to expand because of the Obama energy policies.  Look forward to efforts to pass a carbon tax. Both of these misguided programs will lead to reductions in employment, reduction in work hours and layoffs.  No matter what they are called these programs will pull money from the middle class reducing spendable incom.

It is estimated that the Affordable Healthcare Act will raise the cost of employing a person by $2,000 per month over the employment cost at the end of 2012.   Part of this cost will be dollars paid for insurance and part will be administrative costs to ensure compliance.  The burden of these costs will settle into the middle class.  Prices for everything will rise.  We are told for example fast food costs must rise by 10 to 15 percent to recover the healthcare cost.   We will have less disposable income and that equals a slowing economy.

Most business people track their cost very closely.  The more it costs to do business the less they have as profit.  Tracking cost is not just an administrative exercise, it is a management process to reduce operating costs.  Government fees, taxes, employer social security contributions, mandated healthcare costs, etc become fixed costs.  They are government controlled and allow the employer very little opportunity to manage them down. The taxes, fees and mandates that are employee related can only be managed through force reductions.  Reduce hours below the full time employment threshold or reduce the total force.  If a business is to continue as a viable enterprise they must earn more than they spend, they must earn a profit!   Profits are not optional, they are mandatory.  

I have seen nothing in any of the Obama rhetoric to indicate that they have or will adopt a pro business posture which is another way of saying that Obama is not pro-employment, pro-jobs.  I have heard that we have passed the tipping point, more voters depending on government that producing income in private enterprise.  We are most certainly past the debt tipping point given our current level of gross national production.  These two conditions do not bode well for the next four years.  I don’t believe that the voters will receive the prosperity they voted for.  It would appear that instead of prosperity we may actually see the recession turn into a depression.

 

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