Wednesday, November 2, 2016

The Economy's Coal Mine Canary

A downturn in the restaurant industry could spell recession.

The restaurant industry saw a 2.8% decline in business this past fiscal year, and turned in its weakest performance since 2009. Economic analyst Paul Westra sees the downturn as a looming “restaurant recession.” The Wall Street Journal reports that “in the last 10 months, eight major restaurant companies … have filed for bankruptcy.” So what’s to blame for the decline? The usual culprit is an increase in the price of gasoline leading to increased food prices. However, gas prices have declined significantly for over a year now. Instead, it appears that the number one reason is ObamaCare. According to a Civic Science survey of Americans, of those who ate fast food regularly, there was a cutback of 47% due to rising health insurance costs. In other words, Americans are really beginning to feel ObamaCare’s pinch on their pocketbooks. (That’s not to mention restaurant owners themselves.) An April survey conducted by the National Restaurant Association found that nearly 45% of Americans are eating out less than they prefer.
Even some Democrats acknowledge the mounting costs of ObamaCare. Minnesota Democrat Governor Mark Dayton recently stated, “The Affordable Care Act is no longer affordable to increasing numbers of people.” Bill Clinton called it “the craziest thing in the world” where Americans “wind up with their premiums doubled and their coverage cut in half.” The truth is, it never was affordable — by design, as its architect, Jonathan Gruber, recently remarked. Unfortunately for the nation, the ObamaCare-created “restaurant recession” is the proverbial “canary in the coal mine” for the rest of U.S. economy. Many economists now fear another recession on the horizon as ObamaCare’s impact is felt across the broader economy. The number of Americans who hate this law will only continue to grow.

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