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Mike makes an important point above.

My two cents to Mr. Sheehan's interview? The biggest financial problem facing the U.S. is not the seized credit markets, the potential $1 trillion loss in the housing market, or even our $9 trillion debt. Rather, it is the (present value) $40 trillion health care deficit over the next 75 years. Given that our GNP is just $14 trillion and household financial wealth is $45 trillion, healthcare costs--which are growing faster than the economy as a whole--is a massive frictional cost that will drive long-term rates several hundred basis points higher, I fear. In fairness to Mr. Sheehan, our conversation was limited to the credit markets; no doubt he would have mentioned health care if I asked him.


Hewitt
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