Obamacare Is No Big Deal… Yet, Says Wesbury

Jeff Macke

The crisis in Washington D.C. is spiraling out of control. The government has been shut down for over a week, the debt ceiling lies dead ahead, and the stock market isn't quite sure what to make of it all. At the heart of the debate, the effort to de-fund the Affordable Care Act may seem like a futile gesture, but the cost on society is very real.

To make matters worse, even some conservatives question just how negative an impact Obamacare will have on the economy in the short term. Count First Trust chief economist Brian Wesbury among the doubters. Despite his status as a bona fide economic conservative, Wesbury freely concedes that Obamacare wouldn't be the end of the world as America knows it.

"Canada, France, Germany, the UK — they all have national health-care systems, and if you look back at the last 20, 30, 40 years, their stock markets are up, their economies have grown," says Wesbury. The threat isn't economic direction but ideology and pace of growth. As he sees it, bigger, more burdensome government slows innovation and expansion over the long term.

Related: Default Talk Is Just a 'Scare Tactic,' Says Wesbury

Over 20 years the difference between a 1.5% and 3% growth rate is massive. Because of the compounding impact, the spread is enough to separate economic superpowers from the has-beens. Wesbury shares the concern of many more centrist conservative economists that Obamacare is another step toward the death of American innovation and growth. It's a concession of maturity potentially leading to, what he calls, a "social welfare state and king of a 'European' society."

However, it's open for debate whether or not avoiding that fate is worth shutting down the government.

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