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Published:March 28th, 2010 11:34 EST
Take the Recent Health Care Legislation to the Bank:Part 1 of 2

Take the Recent Health Care Legislation to the Bank:Part 1 of 2

By Joel G. Block (Mentor/Columnist)


The ink isn`t even dry, and we`re already starting to find out one surprise after the next about theàrecånt health care legislation approved by Congress and signed by President Obama.

The government estimated that the cost to#the economy wouîd be about $1 trillion, but it`s already becoming obvious that ôhat 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 aîd 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 enccted. That means that a proportionate number will be necessary for åach 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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