Friday, June 29, 2012

Supreme Court Ruling: A Pyrrhic Victory for Obama
Another victory and we are ruined.
Pyrross, King of Epirus, in Plutarch’s Phyrhus, meaning a victory that harms  the victor more than the vanquished
No human wisdom can calculate the end. It has but one thing certain, and that is to increase the taxes.
Thomas Paine (1737-1809), Prospects on the Rubicon
June 29, 2012 - It has been 24 hours since the Supreme Court ruled.  In those 24 hours I have received a near record number of hits on my blog and phone calls asking for my read on the situation.  
After a day of mental digestion, I conclude Obama won a Pyrrhic victory which may cost him the election in November.    He won the judicial constitutional battle, but lost the policy war.   In this time of record deficits and record spending, public attention shifted from constitutional issues to taxation issues stemming from a deeply unpopular health law that will require unprecedented levels of taxation, which will fall on everybody, particularly the middle class.  
As far as doctors are concerned,   the decision, as the Doctor Patient Medical Association, said  is “A slow motion disaster,” which if implemented, will strip doctors of their autonomy, income, status, and flexibility. 
As I said in a previous post in November 2010, “Impact of Obamacare on Doctors,”
“59% of doctors think the quality of medicine will decline in the next five years and 79% are less optimistic about the future of medicine. 69% are thinking about dropping out of government health programs, 53% would consider opting out of treating insurance-covered patients, and 45% have considered leaving the profession altogether.”
The Court decision does not change those figures.
The spinmeisters have made their statements, the consensus is that the Court and Chief Justice Roberts handed Obama critics a golden opportunity on a silver platter, if I may use a precious metal metaphor.  
The Supreme Court moved the debate from the judicial box to the ballot box.  The Court  focused on the constitutionality of government’s power to tax.  And it drew rapt and undivided attention to the monumental tax burden the health law will bring if Obama is re-elected - $400 billion already in the pipeline,   trillions more as Bush tax cuts are phased out, the estimated $1.76 trillion to $2.5 trillion the law will cost from 2014 to 2024,   much of which will fall on the middle class and future generations.
Here is how Douglas Holtz-Eakin , a distinguished economist and present of the American Action Forum, reacted,
The field of play now shifts from a legal battle to a policy debate. In addition to the Court's endorsement of the policy foundations of the challenge to the ACA, the fundamental policy flaws remain."

"The ACA remains a damaging, anti-growth vehicle for taxation. The so-called Medicare surtax increases marginal tax rates on the return to saving, investment, and innovation. The medical device tax will hurt innovation and cost jobs. A bill to repeal it is gathering dust in the Senate. Also, the insurers fee - the "premium tax" - will roil insurance markets, disrupt patient-provider relationships, and the vast majority of the burden will fall on the middle class. "

"The ACA remains an unwise expansion of entitlement programs at a dangerous fiscal moment in U.S. history. The U.S. has suffered a downgrade, has a debt-to-GDP ratio over 100 percent - a level historically associated with 1 percentage point slower growth and a heightened probability of financial crisis - and faces a spending-driven explosion of debt over the next decade. Also, the ACA does not reform Medicare, which has a cash-flow deficit of nearly $300 billion annually and is responsible for one-fourth of all federal debt since 2001.”

I close with a quote from Winston Churchill.  After his defeat as Prime Minister after World War II, his wife Clementine told him, “This may be a blessing in disguise."  Churchill replied, “If this is a blessing, it seems quite well disguised.”
Tweet:   Supreme Court ruling that the individual mandate is constitutional is a Pyrrhic victory for the Obama administration.

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