By Rex Sinquefield, November 1, 2012
This week, millions of Americans remain without power across the East Coast, thanks to the unleashed fury of Hurricane Sandy. Economic activity was suspended in large part, as citizens braced for survival. For those impacted, their personal plans involving future investment, travel and savings were deferred simply to manage their way through their local emergencies.
Many state governments, such as those of New Jersey and New York, are scrambling to deal with their unique concerns, with or without prompt disaster assistance from Washington. Estimates of the damage and lost business from Hurricane Sandy now range from $7 to $50 billion. Thanks to the prospect of swift inter-government cooperation and to the remarkable generosity of the American people, affected communities will chart a sound path toward recovery.
From an economist’s point of view, man-made disasters often create many of the same direct and indirect effects as those brought upon us by more natural forces. The economic losses from man-made disasters are just as real as those from natural disasters. New taxes imposed today are collected from tomorrow’s pocketbooks. New taxes and increased government spending shift resources away from the individual and the entrepreneur. In 2014, the new federal taxes enacted as part of Obamacare could create similar and dramatic consequences within our states. Fortunately, there is still time for Congress to act in 2013 to prevent much of this damage from hitting.
First, there is little doubt that implementing Obamacare would disrupt access to many healthcare services provided today. Avik Roy, another Forbes contributor, has published physician results from his state surveys related to Obamacare. In Ohio, estimates are that nearly 1 in 4 doctors will stop accepting Medicare patients altogether. Thirty percent of Ohio doctors say that they will place “new or additional limits” on accepting Medicare patients after their fees decrease by ten percent or more. In Wisconsin, 21% percent of respondents to the National Physicians Foundation survey indicated that they plan to raise fees on those with private insurance in order to compensate for the cuts.
Robert Book, along with former White House budget official James Capretta, have now detailed the state-by-state impacts of Obamacare cuts to the Medicare Advantage Plan used by many seniors. They found that Obamacare would cut $3,203 in Medicare Advantage services for every Floridian enrolled in the program: a 21% cut. More than one million Florida seniors would be impacted by these cuts.
Economists know that when you tax something, you get less of it. Many working families cannot easily afford an additional tax of more than $1,300 (as stated in Roy’s Forbes article) a month for the average family of four. Colorado’s share of these new taxes is estimated at $20 billion. Virginia’s load is tallied at $32 billion. If such figures are even remotely correct, how will middle class America afford such a permanent change?
It does not have to be this way if informed voters within their states speak with the power of their vote. States, such as my home state of Missouri, should consider voting down a governor’s use of state healthcare exchanges. Other legal challenges, such as the arguments posed from Oklahoma, may help steer our state ships away from this costly storm. Voters should speak up now or otherwise batten down the hatches in their states for the economic storm that lies ahead.
Original article at: http://www.forbes.com/sites/rexsinquefield/2012/11/01/obamacare-the-latest-man-made-disaster-foisted-on-the-u-s-economy/