Larry Kudlow

Obama's response? He says reform "would not basically pull the plug on grandma because we decided that it's too expensive to let her live anymore." But the House bill comes dangerously close to giving unelected health boards the power to pull that plug. And as policy students know, it's not always the precise wording of legislation that counts, but the regulatory interpretations of laws that are made by federal and state officials.

So, in a sense, Obama's denial was a non-denial denial. He should have unequivocally demanded that the death-board language be removed from any bill. But he didn't -- perhaps because he agrees with it. In interviews earlier this year, the president said that while he would have fought for his own grandmother's hip replacement, clinically he can see how these expensive decisions should not be made.

Grandma may indeed represent Obama's biggest political problem right now. As Team Obama attempts to placate concerns at the Congressional Budget Office that health reform is a budget-buster, seniors are rightly worried that the Medicare program on which they depend will be ravaged by cost cuts.

Rasmussen now reports that elderly folks over 65 are against Obamacare by 56 percent to 39 percent. That's a bad number for Democrats who rely on seniors to maintain their governing coalition. Incidentally, polls also show that about 75 percent of Americans are satisfied with their health-care services, while 80 percent to 90 percent are happy with the whole U.S. health-care system.

It's still tough to know whether this behemoth government takeover of heath care will actually pass. But two key markets are betting against it. First, over at the Intrade pay-to-play online betting parlor, the bid for the U.S. government health-plan contract is only 38 cents. That's down from 50 cents in late July. Second, the share prices of big private health insurers have rallied in recent weeks. UnitedHealthcare is up 13 percent, Humana is up 12.4 percent, and Aetna is up almost 10 percent. These firms will be decimated if the government insurance plan passes. But investors are now predicting it won't.

For the sake of economic freedom, liberty and fiscal sanity, let's hope the markets are right.

Larry Kudlow

Lawrence Kudlow is host of CNBC’s “The Kudlow Report,” which airs nightly from 7 p.m. to 8 p.m.