GDP increase from Health Spending: Decreased Discretionary Spending the Result

It’s reported that consumer spending has increased since the 1960’s  from 61% to  71% of the the gross domestic product.  However, most of the increment is health care costs. 

Medical payments now account for about 16 percent of total consumer spending, more than food and clothing combined, which make up about 11 percent, or housing, which accounts for about 15 percent. The rising cost of health care means it will consume an even bigger share of the world’s largest economy as the population ages, according to economists like Jay Feldman.

“At the consumer level, it may squeeze out other discretionary spending,” Feldman, an economist at Credit Suisse in New York, said in an e-mail. “At the government level, rising Medicare and Medicaid spending will inevitably put pressure on other government spending priorities. At the business level, it could curtail investment, or more likely, suppress wages.”

Capture

Medicynical Note:  Increased discretionary consumer spending as a proportion of GDP (over the last 50 years in the U.S.) is an oxymoron.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s