No Matter What Happens, Obamacare Is Working



At the end of April, when the monthly GDP report found a sluggish, barely growing economy that had expanded by just 0.1 percent in the first quarter of the year, former White House Press Secretary Jay Carney found the good news.

Health care spending was up, way up, thanks to Obamacare. The Bureau of Economic Analysis (BEA) had found that health spending had grown by 9.9 percent, the fastest growth of any quarter since 1980. The health law was working—and had saved the economy!

"The fact of the matter," Carney said at a press briefing, "is—and the GDP report makes it clear—it was consumer spending on health care that helped drive economic growth in the first quarter, and that is directly related to the increase in people who have insurance because of the Affordable Care Act."

This was a bit rich coming from the same White House that had argued for years that the health law would hold health spending in check. But now there's another problem: Health spending appears not to have grown at a record rate during the first quarter of the year. It didn't grow at all. In fact, it shrank by 1.4 percent, according to a revision released today by the BEA.

This is…very strange. As Phil Klein points out in The Washington Examiner, the original estimate showed health spending rising faster than any time since 1980. Now it shows it shrinking more than any time since 1982. The BEA says the revision is the result of new data from the Census, but even still, it's a bit a head scratcher.

And overall, today's report is not great news for the economy: The BEA also revised first quarter GDP numbers down, finding that the economy shrank by 2.9 percent, the largest contraction since 2009. The health spending revision was probably the biggest factor in bringing it down.

Perhaps, however, the White House, in its boundless optimism, will find the upside: The administration can now go back to arguing that Obamacare is working because it's causing health care spending to shrink. 

NEXT: A. Barton Hinkle on Hillary Clinton's Economic Fallacies

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  1. “This was a bit rich coming from the same White House that had argued for years that the health law would hold health spending in check.”

    Why, medical care is so 2010! Obo ‘fixed’ it and now we have to worry about income gaps or something. What was that?
    Well, the rethuglicans are making a mess of it, whatever it is.

  2. Cooling is warming, growing is keeping in check, four legs good, two legs better.

  3. The BEA also revised first quarter GDP numbers down, finding that it shrank by 2.9 percent, the largest contraction since 2009.

    Work with me here. So Obama saved the country from depression and saved the economy in 2009. Okay, if Obama saved the country and got the economy out of the ditch, then it going back in the ditch isn’t Bush’s fault. If it is, then Obama didn’t really fix the economy after Bush did he?

    1. Obama fixed the country but that damn Bush made those fucking teathuglicans fuck it all up again.


      1. Quantum tunneling on the macro macro level. You believe in science, don’t you?

    2. What a disaster. We are entering a recession and nobody wants to admit it.


      1. A two percent contraction is fucking huge. And yeah, we are entering a recession and doing so with a lot less money and a lot worse economic start point than we did in 09.

        But the DOW is up, so things are great.

        1. But the DOW is up, so things are great.

          That’s might be the worst part of all. Historically, the stock market in the aggregate has been one of the best leading indicators of economic growth (which is itself a paramount leading indicator of wealth creation across all levels of an economy), but the Fed’s perpetual motion machine has basically killed the relationship between the two.

          If this situation persists, I’m afraid that we’re going to see a lot more agitation for government interference in the Market itself and less trust in the free-market brand, since for most voters “market” means the stock market.

        2. Two-point-nine percent, not just 2%. So nearly a 3% contraction. That is abominable. Can the following 3 quarters actually dig out from that for a positive GDP number at year’s end? I doubt it.

        3. I wouldn’t be so quick to say that. Their numbers are so far out of whack I am not certain we know what is happening right now with the economy. When you have those kinds of swings within a few weeks of each other I would have to say they have now messed up data collection.

      2. http://www.marketminder.com/a/…..4404d.aspx

        but especially, http://www.marketminder.com/a/…..8d661.aspx

        “Thursday, investors were barraged with two things we at MarketMinder make every effort to inoculate readers against: Myopic, skewed headlines and sharply volatile markets that give them fear-induced credence. Volatility such as the -2.0% S&P 500 return on Thursday can be tough to stomach, but it’s a mistake to read too much into one day’s action.[i] Virtually anything can cause stocks to wobble to this extent and fact is the S&P fell -2% or more in a day an average of once every 30 trading days in the thirty years from 1982 ? 2013.[ii] This is not to dismiss volatility; it is to say big moves aren’t so abnormal that there must be some bigger meaning behind them. But that doesn’t stop the media from trying, which is bad for investors but a plus for us because, you know, it gives us something to do”.


    3. It’s classic progressive thinking: Imagine how bad things would be if we didn’t act! I mean, yeah, this is way worse than our predictions for what would happen if we did nothing, but that doesn’t mean we hurt things with the actions we took, it means the problem was just bigger than we realized!

  4. It’s not a head scratcher Peter.

    This is the most transparent administration ever.

  5. When you go to a doctors office and labs and have medical problems taken care of early on it tends to costs tens of thousands of dollars less than having to go to a emergency room and being admitted to a hospital.

    1. Not necessarily. It only costs less if they successfully figure out what is wrong with you and the money saved by people like you is greater than the money wasted on people whose labs come back negative.

      It is a lot more complex of a problem than that tired piece of Prog retard spin makes it out to be. Here is something for you to think about, the answer to a question isn’t always the intuitive one. The world is a lot more complex than you think it is. So just because an answer seems logical and sounds good, like that one, doesn’t mean it is true. You have to think a little deeper about these sorts of issues.

      1. Yeah, remember how HMO’s were going to reduce costs because PREVENTIVE CARE!!!

        Didn’t happen.


        1. The Preventative care unicorn is one of the great species in Progland. It feeds perfectly into their simpleton explanations for things. They so want to believe that life is simple and explainable rather than complex and difficult to understand much less control.

        2. There is no doubt preventative care can save money. The problem is you don’t really need access to a doctor to do most preventative care. Eat healthy, exercise, don’t smoke. Simple. The problem is people want to live an unhealthy lifestyle, go into a doctor’s office and get a magic pill. No politician is going to tell their constituency that they are stupid and lazy so they promise easy fixes on someone else’s dime.

          1. and so, they point to other societies with socialized systems – conveniently neglecting that those folks typically have vastly different lifestyles than most Americans – insisting that it’s all because of free health care that outcomes elsewhere may be better.

          2. There is actually a lot of doubt Florida man. If I am destined to die in a car wreck this weekend, my eating healthy isn’t going to save much money will it?

            Since we don’t know the future, the best you can say about any preventive care is that it is “likely to save you money”. That sounds like then it would make sense to do on a large scale. If a million people do it, you make money overall. But even that is not clear. The preventative care is never free. So it has to be effective enough to justify the costs for cases where it doesn’t work. Further, our medical knowledge has to be solid enough to ensure that we are even doing the right thing. There has been a lot of snake oil sold over the years as “preventive care”.

            In the end, medical care and lifestyle decisions are far to complex and individualized to be susceptible to any sort of central planning or generalization.

            1. I’m talking about known chronic illness that can be modified. Type 2 diabetes can be cured by weight reduction and diet. Smoking is highly correlated with vascular disease and certain cancers. Obesity is strongly correlated with hypertension. I’m not saying a healthy lifestyle will prevent all death but it does reduce healthcare cost. Not smoking saves you the money you would spend on tobacco, lost income to sick days, and hospital bills for vascular disease. Running is free, playing basket ball is free. My greater point is that preventative care doesn’t have to come from a government program. But no progressive is going to mention that because there is no graft in it.

              1. Those things seem obvious and I don’t advocate getting fat. Regardless at a societal level, there are so many second order effects even things like those that seem obvious really are not. For example, it is pretty clear smoking is bad for you. So, it would seem “don’t smoke” is a good candidate for saving money via preventative care. Sounds good until you realize that people who quit smoking tend to gain weight leading to other health problems and those problems and generally people who live longer cost more money than lung cancer which is generally a short cheap death.

                Is it better for you not to smoke? Sure. Who wants lung cancer. Would society be better off if fewer or no one smoked? The answer to that is a lot less clear.

                1. IIRC, smoking actually leads to decreased healthcare costs. Sure, fighting lung cancer can get pricy, but being dead is cheaper than Viagra and replacement hips for 20 years.

                  1. IIRC, smoking actually leads to decreased healthcare costs. Sure, fighting lung cancer can get pricy, but being dead is cheaper than Viagra and replacement hips for 20 years.

                    Cost to whom? Sure it saves “society/insurers” money, but it cost the individual the rest of their life, which they might consider priceless. If we had a free market in healthcare your statement wouldn’t make any sense. Unfortunate we owe our health to the collective now.

                  2. I actually heard a doctor spokesperson for the tobacco companies make that argument on a radio call-in show.

                    And, to some extent it is true. I’ve read stats that show if you smoke your whole life you’re likely to die in your mid-60s.

                    He got ripped to shreds, by the way, by the call ins.

                2. I guess we are talking about different problems. I’m thinking about individual choices to save an individual money instead societal cost. If we didn’t socialize the cost of healthcare I doubt anyone would care about what anyone else spent on healthcare.

                  1. Oh, silly FM. Sure, reasonable people wouldn’t care. But to the progressives they would still see some people spending more on healthcare than others are able to, and rage about how unfair the inequality is.

          3. Eat healthy, exercise, don’t smoke.

            What about life is fun then?

            Agreed on the access to a doctor part. Many things can be made cheaper by allowing nurses or techs to perform them.

            1. Alcohol is healthy in moderation so there is that.

              1. But moderation isn’t fun.

          4. There is no doubt preventative care can save money.

            You’re describing a healthy lifestyle, not preventive care.

            Preventive care is basically running a lot of tests on people who show no signs of disease. In the aggregate, it doesn’t reduce costs at all, because (surprise!) most people are asymptomatic because they are healthy, and the testing healthy people is a deadweight loss.

            1. You are correct. I conflated a preventive lifestyle with preventive care.

          5. NO. There is a LOT of doubt that preventative care can save money. This is an example of a fallacy that has just been repeated so many times that people accept it as fact. http://www.politifact.com/trut…..ves-money/

        3. HMOs were a largely Republican creation. That’s why preventative care didn’t work. Because Republicans.

          The Unaffordable Care Act is a Democrat creation. So preventative care will work this time.

    2. That all depends on your priors. What is the probability that a ~$50-100 visit to the hospital will successfully identify a medical problem which costs $10,000, when the latter problem is quite rare until one gets to be a certain age? Preventative medicine is really no panacea, especially when it does not account for age or one’s medical condition and the evidence on whether it really does reduce costs is ambiguous, at best.

    3. Go to lots of expensive doctors’ appointments, get lots of expensive tests, take lots of expensive pills, and voila you save lots of money on health care.

      1. +100 dietary supplements.

    4. At least you take your talking points straight instead of trying to water them down with thought or context.

    5. Driveby troll.

  6. No Matter What Happens, Obamacare Is Working

    Weigel/PBPlug, is that you?

  7. If it’s a good outcome, it was Obama’s plan all along.

    If it’s a bad outcome, it was the market and/or evil Republicans.

    Hope that clears everything up.

    1. But every outcome is good. Just ask shreek.

  8. A feature or bug of Obamacare, you decide:

    As many people expected, not enough young folks are signing up to pay the high premiums. But the structural problem could run much deeper. The young people who are enrolling also tend to have more serious (and costly) medical problems.

    In short, Obamacare’s young enrollees aren’t invincible enough to underwrite the law’s delicate scheme.

    Surveys: Young Obamacare Enrollees More Likely To Have Serious Health Problems

    1. It is the death spiral that everyone with a brain predicted would happen. Did Obama and Pelosi plan it that way as part of some evil long game to get single payer or are they both such profound morons they actually didn’t understand this would happen? I think it is the later. I always bet on moron if it involves these people. Regardless, the answer doesn’t matter. The death spiral is real and we are left with the problem regardless of the intentions of those who created it.

      1. I think they’re actually such profound morons they actually didn’t read the bill.

        1. They are definitely profound morons. No doubt about that. Are they morons who managed to intentionally plan the destruction of the private insurance market? Only they know that.

        2. I doubt 1% of the politicians read the bill.

      2. When Carn(e)y said that Jon Stewart gave Obama his toughest interview he gave away the game: they’re idiots. They think a comedian provides insightful political analysis. Why argue pros and cons when politics can be boiled down to the best punch line?

        1. Actually, I’m willing to believe Stewart was O’s toughest interview, since he didn’t get a hard-on looking at Obama’s pant leg or kiss the ring beforehand.

          1. I wouldn’t be too sure of that. Have you read Obama’s poetry? Definitely gay. No question.

  9. Excuse makers have excuses.

  10. I can’t really put my finger on why, but Jay Carney’s voice reminds me of windows breaking.

  11. Free enterprise and individual decisions win out every time.
    I live in Mexico and almost nobody has insurance. We just go to one of the thousands of private doctors or clinics, pay cash (as little as $2/visit at the popular “Dr. Simi clinics” Most medicines and all lab-work require NO prescriptions.
    My double cataract operation costs $1400 complete with all tests, medicines, operations, hospital stays etc.
    Get the govt OUT of almost anything, and it is better.

  12. The first word, announced by the White House and printed and broadcast everywhere, is what sticks best (except for us immunized by reality). They know that, attorneys arguing a case to juries know that..

  13. At the direction of the Obama administration, the Census Bureau has changed its data collection for health care spending to such an extent that even the Bureau admits that the results can no longer be compared to past results. For Carney to do so in defense of Obamacare is flat wrong, and it’s hypocritical of the administration to try.

  14. It is great they screwed up the data. If they hadn’t and they had just posted 2.8% reduction in health care spending it would have been easy to say, and not unreasonably, ‘more people covered, less money spent, we are producing exactly as we predicted’. Now they can’t.

  15. When I saw the review of this item in my email, I just HAD to click it to see what kind of ‘ironic font’ it was printed in…

    Then I saw ‘Jay Carney’ and right there a lot became clear.

    He’s always been so easy to disbelieve or ignore, and this commentary was no change at all.

    Thanks for the laugh, Jay…

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