So far it seems, ObamaCare has had no effect on stocks as the Dow eclipsed 16,000 for the first time ever yesterday. This happened even though for a month now the new Healthcare.gov website has been atop the news every day as has been the monumental failure of the Affordable Care Act. Everywhere you turn there has been news of people losing their health care plans and prices going up for those who still do have coverage.
Yet, the stock market has laughed all of it off as though it means nothing.
How long will ObamaCare continue to be a non-factor in the investing world? Will it, at some point, start to drag down the Dow in 2014 if things don’t get fixed soon?
No Fix For ObamaCare
I am going to assume that ObamaCare is going to be an incredible drain on America’s money and psyche for years to come. So far we have gotten nothing for the billions of dollars spent other than a lot of frustration and anger. And that is with just a small part of the country (those who buy insurance on their own and those who need insurance) being affected. Just wait until the employer mandate kicks in and the entire country is affected in 2015. If we get that far with this ill conceived law, all hell could break loose.
In 2014, surely the stock market is going to at least indirectly feel some of the weight of ObamaCare. The economy is going to suffer as companies continue to cut back hiring, lower part time employee hours to get them under 30 per week, and some will just quit and go out of business. Fewer small businesses will start up as the cost of doing business and uncertainty about the health care law escalates.
Then we have ObamaCare and its effect on people. Financial uncertainty leads to inaction and people will decide to spend less money (it is already happening at Wal-mart). Higher insurance premiums will lessen people’s disposable income and savings which will mean people will have less money to spend even if they wanted to keep spending. That means corporate profits will go down and the stock market down with it.
As health care costs go up, people will decide to lessen their contribution to 401K plans as they need more money to pay bills (401K’s are a major contributor to the stock market). The stock market is fueled by regular folks and not just by the rich. It requires people to be spending and the economy to be running smoothly. ObamaCare is going to severely dampen all of that as it sucks money out of everyone’s pockets.
ObamaCare WILL Drag Down The Market
I do think the stock market has a decent chance of going up in 2014. But sooner or later, one way or another, I believe ObamaCare will hurt the stock market. It may not be visible on any one day or during any one month but the ACA lends so much confusion and uncertainty to the nation’s finances that investors will pull back and try to keep more money in their pockets. It is something that may develop slowly throughout 2014 as businesses face an onslaught of adverse conditions in an economy that is already in deep trouble.
ObamaCare is going to negatively impact this country in so many ways it impossible to cover them but you might start by reading this if you have any doubts. The thing is, it will eventually affect every American because every American needs health care and there is no way to avoid the financial ramifications of the law. There is just no where for anyone to hide and the stock market won’t be able to hide either!