Our lender is watching…

A new study by the Centers for Medicare and Medicaid Services (CMS) has found that the health care reform bill passed by the House of Representatives would increase health care spending to 21.3 percent of GDP by 2019, compared with 20.8 percent under current law.  The study also provides a clearer cost estimate than that provided by the Congressional Budget Office (CBO).  While the CBO estimated a 10-year cost of $894 billion, a figure which assumes little government spending in the early years, the CMS study puts the cost at $1 trillion from 2013-2019.

It’s no wonder then why the Chinese, who own nearly $2 trillion in assets in the U.S., are watching this entire health care debate with interest.  As the primary creditor of the U.S., China is about to see its bloated borrower double its national debt over the next decade.  It wouldn’t be too surprising if they suddenly were to put substantial portions of their U.S. holdings up for sale.

Source:  reuters