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Friday, January 14, 2011

About "Escape Velocity"

To all those hipsters who were impressed with "escape velocity" and, you know, this or that Wall Street economist who upped their 2011 GDP forecast (as if ...):

"U.S. states will contend with about $140 billion in deficits in the next fiscal year, the Center on Budget and Policy Priorities, a Washington research group, said in a report issued Dec. 16."

How much was that social security tax cut, $120B?, maybe half of which will go to pay down debt and keep pace with rising energy prices?

"I think we need a bigger boat."

And, in case that doesn't make the case, consider these "headwinds", which suggest that even fewer are going to have additional cash to spend because of the 'tax holiday':

Employers can expect to pay 8.8 percent more for their employees’ healthcare premiums in 2011, the highest increase in five years, according to an analysis by Hewitt Associates. Employers’ healthcare premium costs increased 6.9 percent in 2010 and 6.0 percent in 2009. The 2011 increase is attributed to recent higher medical claim costs, an aging population, and changes resulting from healthcare reform.

The average healthcare premium per employee for large companies will be $9,821 in 2011, up from $9,028 in 2010, according to the Hewitt analysis. Employees will be asked to contribute 22.5 percent of the total healthcare premium, or $2,209, in 2011, up from 21.8 percent ($1,966) in 2010. Average employee out-of-pocket costs—such as copayments, coinsurance, and deductibles—are expected to be $2,177 in 2011, a 12.5 percent increase from 2010.

These projections mean that in a decade, total healthcare premiums will have more than doubled, from $4,083 in 2001 to $9,821 in 2011, and employees’ share of medical costs, including employee contributions and out-of-pocket costs, will have more than tripled, according to Hewitt.