A so-called economist from the University of Asia and the Pacific claimed America’s controversial and highly politicized government shutdown (by the Democrats and liberals) will have a strong impact on the country’s economy.
In an interview with Philippine Star, Cid Terosa said: “If the shutdown will prolong it will definitely affect the exports and investment in the country.”
This issue is all about the failure of the Democrat-controlled Senate and the Republican-controlled House to reach a compromise. The Republicans in Congress passed a bill, which would fund the American government only if President Barack Obama’s Affordable Care law, popularly known as ObamaCare, were delayed a year. The Democrats in the U.S. Senate moved to reject the bill via a vote of 54-46, while the White House ordered federal agencies across the country to begin closing down.
A few months ago a few democratic lawmakers spoke out against ObamaCare. In the end, at least 17 democratic lawmakers voted to defund the controversial healthcare law designed to force Americans to buy healthcare insurance. Obama’s draconian healthcare law also seeks to penalize Americans for opting out or for not buying health insurance.
Here’s a related report from CNN:
For 2014, the flat fee is $95 per adult and $47.50 per child, up to $285 per family. Or the penalty could be 1% of family income, if that results in a larger fine. (Income is defined as total income above the filing threshold, which is $10,000 for an individual and $20,000 for a family in 2013.)
So a person making $50,000 would be subject to a $400 penalty, while a couple earning that amount would each pay $300.
By 2016, the flat fees grow to $695 per adult and $347.50 per child or 2.5% of family income, whichever is greater. By then, the average premium for bronze coverage is expected to hit as much as $5,000 for an individual and $12,500 for a family.
It’s ironic that groups and individuals (e.g., pro-Obama unions, big businesses like Starbucks, among many others) that strongly supported ObamaCare shamelessly asked for an exemptions.
Now it appears that Obama, America’s most obvious Marxist president, was more willing to negotiate with Iran and Syria, but not with Republicans.
Terosa’s argument was based on his understanding that the shutdown will slowdown America’s business and economic activity, affecting export and global business activities.
“Definitely the impact will be strong because the U.S. is a major trading partner and the U.S. has major investments in the Philippines,” he said.
The thing is, America has a private economy not a government economy. If the U.S. economy were entirely controlled by the federal government, much like North Korea’s socialist or state-controlled economy, then I’d say there’s a grain of truth in Mr. Terosa’s claim.
The truth is, the biggest economy in the world is fueled by millions of private firms and small businesses. Also, the latest government shutdown is not the first for the American government. Since 1976, there have been a total of 18 cases on which the two opposing political parties failed to reach an agreement on funding the government.
From an economic perspective only private businesses doing business with the federal government and its agencies will be directly affected by the shutdown. Several crony companies doing business with the hardest hit federal agencies will suffer, or, might even go out of business.
Plus, even if Terosa is right, the Philippines does not really get high amount of US FDI. We are not the main trading partner of America in Asia. America’s biggest trading partners in Asia include China, Japan, South Korea, Taiwan and India.
On the other hand, Malacanang palace said the shutdown will not affect the country’s economy.
Strategic Communications Secretary Ramon Carandang told Manila Times they do not see a “significant impact” of the shutdown in the country’s economy, at least on the short-term.
“We don’t foresee a significant impact in our economic fundamentals. That would depend though how long the shutdown lasts,” Carandang said.
My only deepest fear is that President B.S. Aquino and his communications team might also use this Orwellian term “government shutdown” to defend and rationalize the retention of pork barrel.
- How ObamaCare impacts ordinary Americans