Healthcare costs have continued to outpace inflation and just about everything else within the economy. Generally speaking, prices rise when demand increases relative to supply. The scheme of Obamacare was to force the youth to buy healthcare they did not need to pay for everyone else. The fines have been less than the costs so many of the youth just pay the fine. Forcing people to buy insurance to artificially lower the costs failed because healthcare is no different and has risen, not declined, with the false rise in demand.

Additional forces have also been contributing namely political decisions from Obamacare, additional taxes, and increased regulations have combined to impact healthcare costs. There has also been the notorious increase in lawsuits which influence the cost of malpractice insurance for medical practitioners forcing costs to also rise. Congress would never introduce Tort Reform because there are too many lawyers who would see their big paydays vanish.

McDonald’s is starting to replace people with auto-self-serving. Now Wendy’s is doing the same thing. Wendy’s plans to install self-ordering kiosks at 1,000 stores by the end of 2017. McDonald’s already beat them to the punch but we are witnessing this trend in many other businesses as well, such as movie theaters and airports. Corporate costs will decline with robots and automated order machines contributing to increasing corporate profits since they are not lowering prices. American Airlines is really anti-consumer. They charge $200 to speak someone to change your ticket when the ticket cost is even just $174. Healthcare costs rising faster than everything else will force companies to abandon workers whenever possible and this is impacting both manufacture as well as services.

So, what is the issue? Is it really just hourly wages? No! Any business with more than 25 employees are being hit with rising healthcare costs that amount to a monopoly from which the only possible relief is to eliminate people. Many small companies have tried to pay healthcare and have been forced to keep raising the deductible. Effectively, healthcare is devolving into catastrophic coverage. Many doctors are refusing to take people on government programs including Medicare because the government cheats them and is slow to pay.

Bill Gates may have been great at creating Microsoft, but when it comes to economics and law, he is off in the Cloud lost in his mind. What he has come out as a solution is to tax machines as if they are people? Gates said, “You’d think we’d tax the robot at a similar level” as humans and then the taxes a company pays would support society? So we become a world of couch potatoes?

Just maybe, we stop the subsidizing of healthcare, introduce Tort Reform, and replace government workers with robots to eliminate taxation on the people. That would be one alternative if we are looking at this new future world. In places like Greece, it is the government that accounts for 40% of GDP. In the USA, Fiscal Year 2017 is estimated at a total of all US government spending, federal, state, and local, to be $7.04 trillion. This will be 36% of GDP.

The US National Defense will be 4% of GDP while government pensions will be 7% plus government healthcare will be 8% compared to welfare is only 2%. Even education is 6% and that is highly questionable for it is really subsidizing the socialist philosophy. Our problem is government workers – not welfare or even military.

We need robots to replace government.

QUESTION: Mr. Armstrong; My family have been lifelong democrats and operated a small local business. We were never in the multi-million dollar class, but always found ourselves considered to the the unholy rich. I remember Joe Biden saying that 90% of small business made under $100,000. Those are most likely individuals and not small business who actually hire people. Obamacare devastated our net bottom line and I have seen the light. You wrote before that small business was the backbone of the economy. Why have the democrats always been against small business?

Curious on your take

ANSWER: The problem stems from the fact that to collect money, the top bracket for income tax has progressively been lowered. Back at the time of World War I, the definition of the rich was someone who earned $2 million. Considering a car was $300, that was a lot of money. Then for World War II, the definition was raised to $5 million. There were songs like We’re in the money, we’re in the money; from the Gold Diggers of 1933, reflecting the boom times. The government even printed $10,000 bills.

The rhetoric has been Marxist since the Great Depression, but they call it “progressive” or “liberal”. The definition has changed dramatically so $250,000 is now the equivalent of being super rich during the Great Depression earning $5 million.

Today, small businesses make up: 99.7% of U.S. employer firms, 64% of net new private-sector jobs, 49.2% of private-sector employment, 42.9% of private-sector payroll, 46% of private-sector output, 43% of high-tech employment, and 98% of firms exporting goods. Joe Biden’s justification that the Democrats do not tax small business is just not true. What he counts as small business is self-employed which can be anything from a handyman to jockey racing horses freelance. That is substantially different from small business that actually employs people.

U.S. Census information from 2008 identified a total of 27,281,452 businesses in the United States. The number of businesses operated by proprietors with no employees numbered 21,351,320, which were the self-employed individuals. The Small Business Administration defines small business as fewer than 500 employees – which to me is not small. Add to this the number of businesses having fewer than 500 employees and the number of small businesses comes to 27,262,983. Now, let’s subtract this number from the total number of businesses identified by the census. This produces the number of businesses with more than 500 employees amounts to 18,586. Small business amounts to 99.7% of businesses in the United States.

Big corporations only employ about 38% of the private sector workforce while small businesses employs 53% of the workforce. In fact, over 99% of employing organizations are small businesses and more than 95% of these businesses have fewer than 10 employees. As I stated above, small businesses accounted for 64% of net new jobs created. In fact, many of these new jobs are also new companies. The startup rate in 2010 was the highest it has been in 15 years, but that is because 60% of graduate from college cannot find employment in the field that they paid for a degree. Many are FORCED to start their own business typically one-man bands. The rise in startups is because there has been shrinking roles available in big business as many are replaced by technology.

Small business ALWAYS grow faster creating more jobs than big business with 500 employees or more. In fact, historically, small businesses grow faster at a rate of 3.4% compared to big business which grows on average only 1.3%. Over the years, I have noted why big business slowly die. The boards become dominated by lawyers and accountants and lose touch with entrepreneurship as well as creativity – i.e. Steve Jobs.

The government always focuses on big business because they have the lobbyists who fund campaigns.  During the 2007-2009 Crisis, neither the Troubled Asset Relief Program (TARP) funds nor industry bailouts specifically helped small businesses. In fact, slightly more than 20% of the small businesses get loans from banks and do so only with collateral. Therefore, big bailouts and TARP never “stimulate” the economy. Democrats always hate tax cuts and call it trickle down economics. But when it comes to bailouts, they only focus on the rich because they donate to their campaigns. Democrats talk out of both sides of their mouth. If you want to “stimulate” the economy, directly address small business – NOT the big companies who will not hire anyhow.

Then there is a huge divide between big business and small business. Big corporations are able to claim health insurance policies for employees as a business expense. Employees pay for those policies with pre-tax dollars. A self-employed business owner could not deduct his health insurance. There was a one-year self-employed health insurance tax deduction in the Small Business Jobs Act, but the Democrats would not allow that to be extended.Small businesses who work from home are entitled to take a home office deduction, but some 60% never deduct it for it often results in an audit and the deduction is notoriously difficult to calculate and thus a grey area the IRS loves to attack.

The bottom line is that Democrats rant and rave about the rich, but when it comes to helping small business, they screw them all they can and help big business because they donate for their campaigns. That’s the simple truth.

The debt deal struck by President Barack Obama and the then House Speaker John Boehner back in October 2015, was done purposefully to ensure that the debt crisis would not unfold under Obama and the Democrats.  John Boehner never saw a government role of red tape he never cherished.  The debt deal was absurd that the $20 trillion mark for the US debt ceiling as of March 15, 2017 would become permanent. Sure, on the one hand this could lead to a severe budgetary crisis this summer if the Democrats try to use this to discredit Trump since the media will blame Trump and not Obama.

The March 15, 2017 (Ides of March) date will be used by the media to try to stop Trump tax cuts. As always, politicians put-off whatever they can to keep hiding the truth to create fake reality and the press chimes in. This date marks the end of the debt deferral scheme struck by Obama and Boehner. When this delay expires, the deficit limit is supposed to be frozen at $20 trillion. It then becomes a law AND SOME PEOPLE ARE ALREADY TOUTING THE END OF THE WORLD. Of course, without reform and debt restructure, this cannot become reality. A rise in interest rates alone will increase the servicing and blow-through the debt ceiling. So expect a lot of yelling and incrimination – but at the end of the day, they will still have to raise the debt ceiling – AGAIN! Welcome to 2017!

Yes, this debt crisis is right on time with our forecast made decades ago. Of course, the politicians will be faced with the collapse of socialism. Where will the money come from to keep all of these programs going? The Democrats will call for a massive tax increase as if that will produce something different than a Great Depression as Europe has inflicted upon the Greeks. Honestly, politicians should NEVER be allowed to play with spending. They cannot manage anything and their self-interest of pretending to do a job while lining their own pockets should be a criminal act.

Everything could come to a halt and the Democrats will then try to blame the Republicans. This is how government works – always create a crisis and blame the other party. Obamacare is falling apart as more and more insurers bailout, costs skyrocket, and Social Security goes off the cliff. The Democrats will try desperately to prevent tax reductions for they are closet communists because they want to control your assets with a backdoor where the multinational corps can pay for exceptions. The deficit limit must then be further increased, but oddly enough, Trump is probably the best person to deal with a debt crisis. Trump will at least understand the debt and has previous spoke about restructuring the debt.

All this chaos can reach havoc proportions in the debt markets, but the stock market can be the biggest benefactor for parking money when bonds are not a wise choice. Obama pushed the biggest tax increases for Obamacare off into 2017 to prejudice the next president. Last September I wrote: “Come 2017, we are likely to see Obamacare also collapse.”  Obama has done a tremendous amount of damage as did Boehner. They created the Veteran Health Crisis not paying to take care of the troops and instead gave them a suicide crisis hotline to call rather than healthcare. The lethal combination of backroom dealing has left Trump with little room for action unless he makes a real reform. Just watch how even the press will not attribute everything to Trump.

Trump inherits a pre-programmed time-bomb and Obama has organized protests to try to make sure Trump is blamed for everything Washington created since World War II. The Democrats want to prevent Trump from lowering taxes on companies and citizens, build walls and add border guards to stop the drug trade and increase security authorities because of terrorism. Trump vowed to do more for the veterans when the Democrats cut everything they could in the VA and military. Then there is Trump’s plan to cut off funds to intervening in the world and spend that money home on an infrastructure program.

So as the National Debt is reaching $19,979 trillion, debt has more than 160% since 2000. Under Obama, there was a massive expansion of new debts on the order of nearly $10 trillion dollars taking advantage of cheap interest rates. Obama increased the debt more than the past 43 US presidents combined in nominal terms. Nevertheless, the USA has the only economy that is viable in the West. The American banking system is not shaking as is the case in Europe.

The US economy is holding up the world for about 70% of the US economic output is generated by domestic consumption. If the American consumer stops, Europe and Asia collapse in overall economic growth. So the debt crisis looming on the horizon depends entirely up how bad the Democrats and the press try to spin this to hurt Trump, but they will shoot themselves in the foot. This time, the mainstream media will more likely than not create a serious economic decline in public confidence by trying to pin all the blame on Trump. On top of all this, Moody’s downgraded 24 governments during just the first half of 2016. The rating agencies will downgrade the USA now only because Trump is in office and they do whatever the establishment tells them to do.