Of Deficits, Health Care Reform, Interest Rates and the Value of the U.S. Dollar

These two paragraphs from the Weekly Standard reasonably sum up the connect the dots between health reform, deficits, interest rates and the value of the U.S. dollar:

The president is about to engineer the takeover of the health care sector. Unless Congress refuses to go along with the establishment of a government insurer — voter enthusiasm for this “reform” is minimal — competition from an entity that has no need to make a profit and can count on taxpayer funding if premiums prove inadequate will surely doom private insurers. Estimated cost over ten years: $1.3-$1.6 trillion, adding to the upward pressure on taxes, especially on wealth-creating entrepreneurs, created by the administration’s runaway deficits.

The administration simply has no credible plan to reduce those deficits, and instead talks vaguely of cutting entitlements or the savings from universal health care coverage — never mind that more coverage means higher costs, and the proclaimed goal of prolonging live, however admirable, will drive costs up, not down. Obama’s huge deficits already have purchasers of Treasury IOUs worried that they will be repaid in devalued dollars, which will eventually force wary investors to price the risk of inflation into the price they are prepared to pay for government IOUs. Interest rates rise, economic growth slows.

At least some one, some place, other than in China, is making the connection.