I am not necessarily a critic about this; but the chart is easy to explain. its the law and some 75% of consumer spending growth last quarter was consumers obeying the law and paying for healthcare services, including insurance. The federal deficit is up 14% from last year, same period, and about half that will be Obamacare costs. Is this good? Maybe, maybe not, we shall see. But as you know the same quarter that Obamacare drove some 50% of consumer spending growth for services, the total GDP growth is projected to be near zero. And, as we all know by now, increasing the interest costs in DC is deflationary, contrary to the imagination of MIT Basket Weavers.
So, have Yglesias explain the BEA Report of March 27, 2015, in particular, table 2; lines 16 thru 22. Perhaps Dean Baker might want to really look, anybody up for some real analysis? Of the 1.98% growth in service expenses, health care took .88%, (line 17). That is almost three times the contribution from any other service expenses. The previous quarters it was about .55, still the largest contributor. The quest is will the pattern continue? If we see this high number again in Q2, then we can be sure this Obamacare is not sustainable.
What doea the CBO say about rising deficits?
The main causes [rising deficits] ? A rise in Social Security spending for an aging population, by almost 80 percent through 2024; expansion of federal subsidies for health insurance, by almost 85 percent; and the growing interest payments on federal debt.
These grim projections come despite what the report says is a federal deficit that, for now, is still declining. But that will soon change.
The budget deficit at the end of fiscal 2014 (which comes on Sept. 30) is estimated to be $506 billion, roughly $170 billion lower than the 2013 shortfall.
What is hard to explain is why any systematic connecting of the dots on this topic is impossible for the typical Kanosian economist, they cannot all be that ill trained. Dean Baker is the worst. For three quarters in 2014, the largest, or second largest component of personal consumption growth was Obamacare. Yet that numbskull quoted the personal consumption numbers twice and each time, right in front of everyone, failed to notice this relevant fact. I can expect Yglesias to be simplistic, perhaps even Dean Baker; but there are at least a few Kanosians out there who can do dot connecting, where are they?
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