March 26, 2010

How to Cash in on the Recent Health Care Legislation (Part 1 of 2)

The ink isn't even dry, and we're already starting to find out one surprise
after the next about  the recent health care legislation approved by
Congress and signed by President Obama.

The government estimated that the cost to the economy would be about $1
trillion, but it's already becoming obvious that that number will be many
times higher than the prediction. The government historically undercounts or
fails to count important numbers that it knows it can push on to other
agencies. The $1 trillion may be the federal cost but the overall number
will be more and that's becoming apparent already.

It's already been announced that 153 (or so) agencies will be necessary at
the federal level to administer all of the new programs that have been
enacted. That means that a proportionate number will be necessary for each
state, and probably for each county and each city. So, thousands of new
agencies, with tens of thousands of new government employees will be
required to manage the massive overhaul that is now law.

Although I am a beneficiary of the new law (from the perspective of the
removal of the preexisting condition rules and the lifting of the lifetime
limit clause) these types of government programs worry me. I wonder if
insurance and health care costs will skyrocket? I also wonder how much
government intervention there will be because as we all know that doesn't work
out too well. I wonder what will happen to the quality of health care for us.

What is certain is that the impact on our economy is going to be
dramatic.

I read that Caterpillar and John Deere already announced non-cash charges of
$100 and $150 million, respectively, for this year based upon the impact of
this bill on retiree health care costs going forward. AT&T just announced a
billion dollar non-cash charge and others are announcing adjustments every
day. What that means is the stock market will lower the value of these
companies because cash flow is going lower. As a result we can expect the
entire stock market to head lower. How many trillions is that?

At the same time, the government will be taking on employees at a rapid rate
- probably more than anticipated - increasing the deficit more than
anticipated. That's probably going to be inflationary.

So, if you are one of the country's 300 million citizens, regardless of
which side of the issue you sit on, you can expect to have a stock market
that is lower with growth that is slower and an economy that's inflationary.
The need to move your cash is imperative.

So, how can you monetize the opportunity that's come about  as a result of
this?

Check back on Tuesday and I'll tell you exactly what to do.

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Comments on How to Cash in on the Recent Health Care Legislation (Part 1 of 2) »

Hi Joel,
Great article. I agree economy looks bleak and I worry it will be a long time if ever for a recovery to former living standards.

I've also watched a chilling documentary on the fall of the empire- here's a link and I wonder what's your take on it:
http://www.youtube.com/watch?v=F8LPNRI_6T8&feature=player_embedded

It's about obama, the bankers control and coming dangers to freedom…and on 2nd hour on the climate and carbon tax…

March 28, 2010

Lee Lasman @ 7:30 pm

Excellent quantifiable article on the quantifiable legislation, Joel. I can only imagine how high this debt will be in the future! I'm looking forward to Tuesday. Thanks!

March 31, 2010

Don @ 4:10 pm

Thanks Joel, I'm concerned too about rising costs for many programs of the government. Hopefully, more jobs will be given to the unemployed would aren't getting much help. Looking forward to your 2nd post on Tuesday.

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