Monday, September 07, 2009

'Man does not live by free medical care alone, it takes a little money.' Megan McArdle has looked forward to what Obama will say in his Wednesday speech on health care. To me the exercise is like one of the Godzilla movies. This one might be called 'Obama vs. The Bond Market.' The baby boomers are mindful of the need for the government bonds not to collapse. As Niall Ferguson said of Italy in The Ascent of Money,'as more and more people leave the work force, recurrent public sector deficits mean that the bond market will never be short of new bonds to sell.' Unions seem to be a significant factor in his health care plan as evidenced by his following their line in opposing repeal of the tax deductibility of employer paid health insurance premiums, and unions are not a constituency for the bond market, but in general the baby boomer generation is perhaps a surprising constituency for it. That's what makes Obama's struggle a tough one.

Update: Frobes' Dalmia puts her finger on the pulse of the health care expense problem.

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