This will go down as the year that Big Government overwhelmed Little Economy. All told, $500 billion will be sucked out of the economy by government interventions. That’s 3% of our $15 trillion Gross Domestic Product.
Our current GDP growth is right at 3% so the growth this year will be nil (or minus 3% if you’re a pessimist like me).
The fiscal cliff bill didn’t extend the payroll tax cut. That will take $100 billion out of taxpayer’s paychecks starting; well, right now.
This is the year when all the fees associated with Obamacare kick in. There are 20 different fees, taxes and excise taxes. The total value of all these new taxes is roughly $100 billion, spread evenly across all income groups.
The White House has been hoarding a stash of new regulations. Over 6,000 new regulations kicked in between the election and the New Year. 77,000 pages of rules have been generated since then. Obamacare alone has 15,000 new pages of rules. The total cost in implementing all these new rules is a minimum of $100 billion.
Sequestration was delayed by two months by the fiscal cliff “resolution,” but it will happen sooner or later. That’s another $100 billion hit (and 3 million jobs lost).
Finally, this is the year when all Americans will be forced to buy health insurance. 60 million Americans have no health insurance. Obamacare will cover roughly half of them for free. The rest will have to pay an average of $300 a month or $3600 a year times 30 million equals $100 billion.
Then there’s the $60 billion tax on the wealthy that Congress just passed. 50% of all consumer spending is by the wealthy and 70% of the economy is based on consumer spending.
Hurray.
