Republicans argue it will cost too much, but fixed income markets show little fear that health care will hurt America's finances
Republicans are already vowing to fight the historic health care bill that Democrats in the U.S. Congress passed yesterday, but judging from the collective yawn the bill elicited from bond markets, arguing that the law will bankrupt America is not going to work.
Prices for default insurance on U.S. bonds in the form of credit default swaps ticked only a bit higher in the first European trading since the bill passed, and insurance on U.S. Treasuries is still cheaper than on Japanese bonds or British debt, according to prices from Markit.
U.S. 10-year Treasury prices actually rose, the opposite of what investors fearing a huge run up in debt would expect.
Compare that to the performance of Greek bonds, which is still dismal. They slumped for the third straight trading day, and the cost of default insurance rose to a level about 10 times that of insurance on U.S. Treasuries.
Barack Obama's fight on health care isn't over. The Republicans will argue it's an intrusion of big government, and that it goes against the spirit of American free enterprise, and that it will lead to bigger deficits and higher taxes. But as far as international markets are concerned, the cost doesn't seem to be an issue.