Over at Think Markets, NYU’s Mario Rizzo asks how Obamacare might be repealed. He focuses on the fiscal brawl that will occur when the Medicare cuts must be implemented. Let’s take a look at another fiscal scenario.
The Greek debt crisis is just the leading edge of a global debt crisis in developed countries. It is not Greece that matters to the rest of the European Union, but the precarious position of other highly indebted EU members: Portugal, Italy, Ireland, and Spain. Fiscally sound Germany could bail out Greece, but not all the others. A Greek default (likely if not inevitable) will fracture the EU and the contagion surely would spread to the United States.
The result will be what I call a Leninist moment. Lenin famously observed that a situation must often get worse before it can get better. He had a different idea of what better would be than do libertarians, but his insight is nonetheless correct.
The resulting fiscal crisis in the United States would finally force a serious debate over fiscal discipline. Not even eliminating all defense expenditures would close the budget gap. Could Obamacare survive the crisis?