The budget disaster awaiting the United States if the trillion dollar-plus Obamacare plan is passed was discussed on The O’Reilly Factor last night. Numbers from the Congressional Budget Office on the latest legislative iterations are expected this week.
I think that the most important part of The O’Reilly Factor discussion focused on the sliding dollar, which will worsen considerably with the ballooning costs of Obamacare. Few knowledgeable people believe President Obama’s assertion that it will be deficit neutral over the next ten to twenty years.
With the Obama administration’s run-away spending financed by the Federal Reserve’s newly printed money and with the massive deficits already underway that are largely funded by China, the dollar’s days as the global de facto reserve currency are numbered. Obamacare will destroy the dollar’s worthiness in that regard altogether.
It has been recently reported that key Arab countries (including Saudi Arabia and Qatar) are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, and replace it with a basket of currencies instead.
For his part, while denying any intent to embrace the idea of a global reserve currency replacing the dollar as the world’s de facto reserve currency, President Obama agreed to go along with certain global reforms at two Group of 20 economic summit meetings held this year to show the Europeans and the undeveloped countries how much he wants to get along with the rest of the world. Specifically, he signed on to the International Monetary Fund’s surveillance of the U.S. economy and use of the IMF-created international reserve asset called Special Drawing Rights to help provide funding to undeveloped countries. It is these Special Drawing Rights that are being positioned by China and others to replace the dollar as the global reserve currency.
What will this mean to the U.S. economy? We may well find ourselves giving away dollar devalued hard assets at ridiculously low prices to OPEC countries.
Moreover, the U.S. government will no longer have the advantage, as the issuer of the world’s de facto global reserve currency, of being able to borrow money at a comparatively cheap rate. As a consequence, Americans would likely end up paying much higher interest rates on their credit purchases, including purchases of automobiles and houses. With consumer demand drying up for a long time to come, our economy could well sink into a catastrophic depression.
Obamacare’s reckless spending has a good chance of causing our already sick economy to suffer cardiac arrest.