The Federal Government is the next AIG

Says Krugman:

The basic picture of the federal government you should have in mind is that it’s essentially a huge insurance company

Your insurance payments just went up from 20% of your income to 25% of your income, in the form of federal taxes, thanks to Obamacare. Our beloved Congress just paid out some $3 trillion in insurance coverage for the current depression. Each worker in the USA is paying down a $80,000 of the $12 trillion debt for past insurance mismanagement by Congress.

The same insurance plan sends mandates to California that cost over $3 billion in state taxes, yet the state is broke. The government insurance program does not cover your state bankruptcy, you do. States which are cutting Medicaid to avoid bankruptcy will be required to hike Medicaid expenses by 25%.

Of all of us never really spending more than 20% of income for federal taxes, Krugman expects we will gladly sacrifice another 5% of our income.