Obamacare a Millstone Around the Economy’s Neck

The recent Federal Reserve rate hike was supposed to assure us that the US economy is improving. But as we’ve shown, the actual economic data just doesn’t back up the optimism. At best, the economy remains tepid, and Peter Schiff has argued that it is likely heading toward another recession. As a result, Peter doesn’t believe the rate hike will stick, and a lot of mainstream economists agree.

Now we have fresh evidence of another millstone hanging around the economy’s neck that doesn’t bode well for Fed policymakers – Obamacare.

According to a new study, the national health insurance program is taking a big bite out of customers’ wallets. It appears the so-called Affordable Care Act is anything but affordable. CNBC summarized the study’s findings this way:

Obamacare customers pay more than 10 percent of their incomes toward coverage. And the share of income eaten up can be much greater for some people, particularly if they use a lot of health services under their plan.”

The Obamacare burden falls particularly heavily on the very people it was meant to help. The lower-middle class is feeling the most pain, according to CNBC:

One in 10 Obamacare customers who earn between just two and five times the federal poverty level will have coverage costs that exceed 21 percent of their incomes, an analysis by the Robert Wood Johnson Foundation and the Urban Institute found. And the median Obamacare customer who earns in that range spends more than 10 percent of their income on monthly premiums and out-of-pocket health expenses, the analysis found.”

It’s important to remember that people don’t really have a choice in all this. They can either suck it up and sign up for health insurance they really can’t afford, or they can face a tax penalty for failing to comply with Obamacare’s individual mandate that requires every American to carry health insurance.

This is yet another example of government policy squeezing the middle class out of existence. As we reported last week, the majority of American adults are no longer even part of the middle class.

CNBC highlighted Kevin Broyles, a 63-year-old insurance broker from Knoxville, Tenn., as an example of how Obamacare is crushing average Americans.

Broyles, who had been paying $629 per month for coverage from a long-standing Blue Cross plan for himself, his wife and their three children, recently got an an ‘eye-opener’ when Blue Cross canceled his plan because it was not compliant with ACA standards. He learned the lowest-priced ‘bronze’ plan in his area would cost $1,161 per month, or $13,932 annually to cover himself, his wife, and their two teenage children who will remain on the family’s plan.”

Keep in mind a bronze plan features the highest deductibles and largest co-pays.

Meanwhile, government mouthpieces call all of this a roaring success.

“Millions of Americans will start 2016 with the quality and affordable health coverage they want and need to keep their families healthy and financially secure,” Health and Human Services Secretary Sylvia Burwell said last week.

Obamacare is yet another strain on a struggling economy. If Americans have to fork out a major chunk of their income on healthcare, that leaves less to spend on other things. Federal Reserve central planners depend on Americans like Broyles to spend money on stuff to boost the economy. He can’t buy stuff when he’s shelling out almost $14,000 per year for health insurance.

It’s looking more and more like the Fed picked a really bad time to go for its rate increase. The economy already shows signs of cycling downward, and it appears Obamacare might just push that downturn trend to warp speed.

It’s becoming pretty hard to argue against Peter’s assertion that we have already seen the end of the rate hikes and that QE4 is next.

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