This analysis of GDP consumption from Left Business Observer is intriguing. Has the popular storyline of reckless consumption been wrong all along?
“Everyone knows that American consumers have been on a binge for the last ten or twenty years. Data connoisseurs could even tell you that the consumption share of GDP rose from an average of 64% in the 1980s to 70% in 2007–8. But while the numbers are accurate, they’re not really telling the story of a binge. Much of the rise has come from spending on health care, not flat-screen TVs.”
I’m not an economist (IANAE?) and welcome other views of this data.
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I think you may be onto something Ed – check it out: http://blogs.ngm.com/blog_central/2009/12/the-cost-of-care.html
That is a interesting insight… i never knew we were spending so much on health care.
It really should not surprise anyone that healthcare has been increasing as a portion of total spending. Both the persistant much higher than CPI inflation and the aging population would make that inevitable. The surprise is that it accounts for essentially all of the increase in consuption.
The interesting thing is, as consumer spending on health care has risen, our spending on food has declined at the same rate. The 99-cent cheeseburger might save us money upfront but it’ll cost us more in health care down the road.