Health care is eating the economy

Robert Samuelson

The Washington Post

It’s conventional wisdom that middle-income Americans are feeling squeezed, but most explanations pass over the most important reason, said Robert Samuelson: health-care costs. Many of the Democratic presidential candidates’ policies—such as Medicare for All, free college tuition, subsidies for child care—come with good intentions, but they don’t address the elephant in the room. Our uncontrolled medical spending is crowding out almost everything else. In the early 1960s, “health spending was about 2 percent of federal outlays.” Now it is one-third. Health-care spending makes up 18 percent, or almost one-fifth, of our entire economy. “Imagine what we could do if U.S. health spending had been held to, say, 12 percent of GDP. We’d have $1.2 trillion to spend on other things.” Ironically, much of the Democrats’ rhetoric about how health care is “right” turns out to be “self-defeating and ultimately undesirable.” It makes almost any effort to curb spending subject to attack as “cruel or immoral.” If the government can’t cut health spending, it reduces “spending on other programs, raises taxes, or bloats deficits.” These effects are felt keenly by middle-income and poor Americans, because medical costs consume more of their incomes. And if we can’t stabilize those costs, “expect the squeeze to continue indefinitely.”

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