Future World

Here's a glimpse at the future after 8 years of the combination of an Obama Administration and a Democratic-controlled Congress. Take it for what it is, which is one man's opinion, but you may find some of it resonates.

1. Health Insurance (This one is easy). Although the historic Health Care Act of 2009 did not add a single payer option (i.e. Government Health Care), the Health Recovery Act of 2011 did. As a result of the effect of the two bills, by 2015, most private companies had cancelled their health plans. Companies did this because their employees elected to go on the Government Option for a fraction of what they had been paying for private health insurance through their employer. As a consequence, company plans covered less and less employees every year, and at higher and higher per person/family cost.

Eventually, more and more companies succumbed to the economics and stopped offering private health insurance altogether so the Government "Option" was at long last realized to its fullest potential. By 2015, the waiting time for a knee replacement was 14 months and for heart bypass surgery it was 9 months (for those individuals that survived to see the surgical suite). For the super rich, nothing changed, except the cost of care. Many doctors opted out of Government health care altogether, electing to provide care only to those that could afford to pay for care out of their own pockets, or had private reinsurance to cover catastrophic losses (i.e. procedures costing over $50,000). Similarly, parallel hospitals emerged, some Government, some Private. Care differed dramatically in the two systems. The folks who experienced the most change were the Middle Class and, of course, people at the lower end of the income spectrum. Not only did they lose their company insurance plans, they were left with no other option but the Government "Option".

2. The U.S. Dollar. Some time in 2011, the Group of Five (China, Brazil, EU, Russia and Japan) elected to de-link world commerce from the U.S. Dollar, due to the profilgate spending of successive U.S. Administrations. The twin trade and budget deficits hovered between 2 and 3 Trillion Dollars a year for 8 years in a row. No country wanted to buy Dollar denominated debt or tie their precious commodities to the U.S. Dollar any longer. As a result, by 2014, the Dollar traded basically even with the Chinese Yuan (which was allowed to float freely by 2012). It took 5 U.S. Dollars to buy a Euro by this time. Foreigners had to be incentivized with interest rates of 25-27% to buy U.S. Treasury bills. The high interest rates prevalent in the U.S. had the effect of shutting down the remaining homebuilders. And residential real estate continued to slide, as it had every year since 2006 (which was not unprecedented as Japanese homeowners could attest to after 17 straight years of decline in the 80's and 90's).

One result of the devaluation of the Dollar was that nearly 40% of the U.S. population was now considered at, or under, the poverty line. And unemployment had not dipped below 12% since the Great Recession of 2009-2011. Things looked grim in the U.S. economy, except for the agricultural sector, which still enjoyed strong growth.

3. Mexico. As a result of the stagnating U.S. economy, millions of Mexican citizens streamed back to Mexico, having no employment prospects in the U.S. any longer. This put enormous strain on the Mexican central government, eventually leading to the election of a Chavez-like leader, promising a new direction for the country. Tensions flared on the U.S.-Mexico border, and there were frequent skirmishes in border areas. The new Mexican Government was openly hostile to U.S. interests, nationalizing many U.S. factories in the border areas, and threatening war to protect "abused" Mexican citizens still remaining in California and portions of Texas. Because U.S. Defense budgets had been cut each year since the 2010 pullout from Iraq, the U.S. military was not fully prepared to exert itself in the now lawless border region.

4. Liberty. The U.S. had long ago (2010-2012) abandoned the strategy of cultivating individual liberty and human rights around the world, choosing to become "One Nation of Many" in the world community instead. We had had our moment in the sun, as the center, and the Congress and Administration were uncomfortable playing the central role that a UniPower must play. Partially as a consequence, heinous human rights violations occurred with increased frequency around the world. There literally was no policeman to stop these crimes from happening, as the U.S. did in Kosovo in the early 90's (with NATO grudgingly following behind). By 2014, it was unclear if NATO or the UN had any role at all to play in world affairs, as the chaos of a multi-polar world reduced the role these organizations could play. France, Spain and Italy had already dropped out of NATO and a third of UN member countries no longer paid dues, although they were still ostensibly members of the UN.

MORE . . .

There is a lot more to say about how things may turn out unless we change the dynamic in Washington. This Administration and Congress are doing a whiz-bang job destroying individual incentive and laying the foundation for years of economic stagnation. It has not even been one year and the die is set.