Yes the Economy and Healthcare are connected

President Obama is right about one thing, the economy and healthcare are intricately linked because it is the largest business in the US, we spend about 1.2 trillion per year which is about 9% of the annual Gross Domestic Product. Medicare and Medicaid are paid for both by the Federal Government and by state governments, so you are paying at two levels for them. The problem is that the money for the federal portion is rapidly falling behind.
Recently consumers went on a spending binge, of course Congress has been on a binge since about 1996. By the end of 2008, consumers owed about 130% of their annual disposable income, 13.8 trillion dollars in debt. At the very same time, Uncle Sam on the books had a public debt of 10 trillion, plus 4 trillion borrowed from the "trust" fund and total unfunded obligations to Social Security of 14 trillion and Medicare of 57 trillion. 13.8 trillion and 81 trillion in federal obligations. 94 trillion total and that was at the beginning of 2009 before the inaugaration.
Now everybody agreed that a stimulus package would be necessary but a 400 billion supplemental and a 787 billion plus 1 trillion in additional liquidity pumped in by the Federal Reserve by buying Treasuries with manufactured money. This is what is known as monetization of the debt, unfortunately it will lead very soon to bad inflation. The American public suspects this, so much so that in the latest poll 45% of the public beleives the rest of the stimulus package should not be spent. 44 percent said trying to speed up the spending of the stimulus package is a bad idea. Only 31% said speeding up spending would be a good idea. Also apparently the same 31 percent beleive the stimulus has helped. 33 percent of the public now identify themselves as Democrat, 22% Republican, and 39% Independent, 6 percent not sure. 55 percent do not believe that we should go deeper in debt even if it might mean helping some more needy people.
Many hae contributed to the consumer spending binge which created both the housing bubble and the overvaluation of other assets such as stocks. How do prices rise too quickly, simply the Federal Reserve pumps up the money supply. In 1995 the money supply was equal to a year's output of goods and services by all the workers in the U.S. By 2002 it was 120 per cent, by 2005 it was 140 percent, and now it is 150 percent. Now yes we had some productivity gains in that time, but simply put more dollars chasing only a few more goods and services, that is what created inflation in housing prices and stocks. That is false wealth because you are only getting ahead if you can hold on to your gains. If your gains are caused by a bubble, then unless you sell to a greater fool before the bubble bursts, the potato explodes in your face, and unfortunatley that is what happened to many. Now the very same Federal Reserve that made credit a little too easy, which inflated prices convinced both the Bush and Obama administrations to pump money in to reinflate our economy, we will soon have the same result again, except probably this time the commodites will be food, oil, metals. You can delay purchasing a house or stocks, you cannot delay eating or putting gasoline in your car to get to work. The public has woken up and is starting to smell the coffee. We cannot let Congress, the Federal Reserve and the White House to keep creating inflation. It is time to stop the insane spending, it is time to cut spending, not increase it, otherwise we will be on this hamster ride for a decade like Japan experienced.