The recent announcement by the White House that they are dropping/will accept no public option in their health reform bill has cause the already comatose Intrade market prediction of passage of a federal government run health insurance plan (public option) to completely tank, going from 35% chance of passage to a 14% chance of passage.

This is the single best predictor of the future known to exist — people making bets with real money about the outcome of the future.

Check out the straight down line on this graph.

The exact question Intrade is asking is:

Will a federal government run health insurance plan (a public option) be approved in the US?
A federal government run health insurance plan to be approved before midnight ET 31 Dec 2009

One of the central points in Senator Gregg’s op-ed about our debt is his warning about the Chinese government not buying our debt:

If the Chinese start to reduce their purchases of our government securities because of our need to borrow increasing amounts of money to finance all the spending that the president has proposed, we will have to start offering higher interest payments to potential lenders to make our securities more attractive.

As that interest on U.S. Treasuries goes up, so does the financial burden on taxpayers in the next generation. This would hit the next generation with a double whammy — unnecessary debt we’re already incurring, plus higher interest rates on our borrowing.

Actually, President Obama not only agrees with you Senator Gregg, but was more clear about what was going to happen than your statement above. Last week the President said there “is no doubt that at some point” the countries buying our debt will stop. Not may stop, but will stop.

Here is the President’s entire quote:

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