muses of the moment

December 3, 2012

From Jim Sinclair’s website

Filed under: Economic Crisis, Inflation, Taxes, The Financial Crisis, Unemployment, US Government Debt — totallygroovygirlfriday @ 1:49 pm

This is a post from a CPA from Jim Sinclair’s website about the Heath Care Act’s potential impact on the business community and the US economy. This is a major issue, a tax at a vulnerable point in the continuing US Depression.

Business Owners – Emergency Alert by Barbara

Jim,

I am a CPA and yesterday attended a webcast CPE course on implementing Obamacare for American business.  The bill has mind numbing complexity and I do not pretend to understand it but I can say that in my opinion it will force most medium sized business (greater then 50 employees) to go out of business within a year.

The bill will make it impossible to continue whatever insurance the company has as it will not meet the horrible parameters set by Obamacare with incredible fines for non-compliance.  So this throws the employees on the exchanges (not yet set up) to get their own insurance.  This results in an annual $2000 fine per employee for the company which is non-deductible.  Therefore a company with 150 employees faces a government extortion of $300,000 per year before taxes.  I believe most will choose to close up or downsize to less than 50 employees all working less than 28 hours per week.  Next year most employees will become part time, with no other jobs available, they are facing a catastrophic decline in income, with more foreclosures, more food stamps and I think people literally starving in the streets.

For small business, the additional cost of record keeping to show compliance with the Byzantine regulations will put most of them out of business.  It requires a computer, constant record keeping and totally opaque rules with massive fines for non-compliance.  I can’t begin to get my mind around it.

I am a one person business and I am not sure what record keeping applies to me.  Just not posting a stupid required notice on March 1, 2013 results in fines of $100 per day per employee.

I cannot begin to explain what a catastrophe this is.  I have gone on the internet to see if any published explanations understand this but until I took this course presented by employee benefit experts, I had no idea and neither does almost anyone else.  Their opinion was unspoken, but looking at cost increases for a medium sized business of $600,000 plus, especially one like fast food with many low paid employees, and you are looking at the mass closing of franchises that allow the poor and uneducated to get a start in life.  Can you imagine paying a $2000 non deductible fine to hire someone at $8 per hour.  The massive wealth destruction this one bill will cause is mind blowing.

Thank you for all you do.  I have done all you suggested to the limits of my financial ability so I am prepared.  But I have to say that all my preparations may be inadequate to insure my survival and that of my family and parents that are now living with me.  Thank goodness I no longer have to face the prospect of loading up my Ford F-250 truck with guns and ammo and diesel and driving more than a thousand miles to Fl to try to rescue them.  My Dad who is 96 reads your comments daily but being an optimist, he believes we will muddle through.  I don’t.

You called me several years ago and this kindness motivated me to keep going in the face of a husband with Alzheimer, old age (65) and most of my friends and clients thinking I am nuts.

Thank you again, your kindness to all of us, it is greatly appreciated.

CIGA Barbara

Groovygirl could not agree with Barbara’s interpretation more. The blowback from this law will destroy the US economy which is 70% consumer driven. We are looking at a low in several business cycles at once, as well as Martin’s Major Turning Point in 2015. This law has all parts to make sure 2014-2016 is a major low with the potential to drive a revolution.

If the law is implemented the way it is perceived and no adjustments are made, these are some of the things we can look forward to:

Businesses will have only 50 employees or less  or they will have only part-time employees.

Businesses run and owned by older Americans will just close their doors and retire. It will not be worth the hassle.

Employees will be part-time, thus earning less, (or get two jobs to keep afloat) but will still be required to get insurance or pay a fine. Bankruptcies and homelessness will skyrocket.

There will be no extra income, the consumer driven GDP will fall..hard. (maybe they can change the formula and include health care fines in the GDP number.

Unemployed people do not have to pay fines…yet. More of an incentive not to “officially” work.

Working poor will become just poor, requiring more food stamps, shelters, emergency health care, etc.

All this will do is cause more people NOT to be able to afford health insurance.

Larger companies that will take on this added costs will hire less people, move sections of business overseas, or take less money to the profit line or all of the above.

Everyone will be an independent contractor and will still be required to buy insurance through the Fed program.

The gimmick-ed unemployment formula will be scarcely effected as part time workers are considered as having employment. Whether that employment pays for food is not calculated by the government.

Walmart’s new plan will be that of other companies…click here.  It is not pretty….

Does not sound as if the new Healthcare Law will make health care more available or affordable.

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4 Comments »

  1. Scary stuff. Between the welfare state, the warfare state and the police state, our constitutional republic is at a breaking point. The water is coming to a boil, the frogs are getting uncomfortable but they are not jumping out.

    The following was posted on JS Mineset this morning –

    After many years, I reread 1984 and have started reading Brave New World. It’s amazing the similarities to today. I wonder if Orwell and Huxley had an inside source or a copy of the playbook?

    Comment by sw — December 4, 2012 @ 3:34 pm

  2. Very scary!!

    gg

    Comment by totallygroovygirlfriday — December 5, 2012 @ 11:58 am

  3. Greg Hunter has posted a great interview with Jim Willie. Many items discussed.

    http://usawatchdog.com/gold-is-the-anti-bubble-jim-willie/

    ~16:00 JW: “Obama Care is not intended to provide health care for the poor in the United States, it’s intended to wreck small business. The objective of the Obama administration is to wreck the government, to wreck the economy, to wreck the currency and to finish it off.”

    Comment by sw — December 5, 2012 @ 7:34 pm

  4. SW,

    Good link, good interview.

    gg

    Comment by totallygroovygirlfriday — December 7, 2012 @ 5:18 pm


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