22 November 2017

‘Who Says Obamacare Is Good For The Economy? Goldman Sachs Does, That's Who!’

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Rick Ungar, Forbes:

“The news just keeps getting better and better for Obamacare.

Marketwatch is reporting that an advisory issued by economic researcher Alec Phillips over at Goldman Sachs reports that the Affordable Care Act (ACA) boosted GDP in the first quarter of 2014 and projects that the same will occur in the second quarter.

While Phillips—and other Goldman analysts—had initially been quite skeptical about the impact of the government subsidies provided to the many Americans who will now be able to purchase health insurance, the group has turned a corner and now views the subsidies as a major, beneficial contributor to first quarter numbers and what they project to be second quarter growth of 3.9 percent.

Said Mr. Phillips—

‘While we were initially skeptical of the large estimated effect of the new subsidies on personal income, these now look more reasonable to us in light of revisions, greater enrollment than expected several months ago, and the fact that states are likely contributing to the subsidies on top of the well-known estimates of federal costs.’

Of even greater interest is the explanation provided by the Goldman analyst as to why healthcare spending rose 9.9 percent in the first quarter.  Phillips pins the rise not on some undesired side-effect of Obamacare but on the fact that people had money in their pocket to spend on the health of their families as a result of $37 billion boost in personal income—something also projected to continue into the second quarter.

While the U.S. Bureau of Economics had predicted a higher spending figure on healthcare for the first quarter than what turned out to be the case, it is worth noting that the Congressional Budget Office—back when first reviewing the Senate bill to reform healthcare—predicted that we would see such a boost following the first enrollment period of Obamacare. With so many people having healthcare coverage for the first time this was to be expected— something the opponents of the ACA have repeatedly and conveniently omitted from their latest tirades.

To recap…it turns out that the increased first quarter spending is benefiting the economy rather than serving as proof that Obamacare is damaging the economy as the anti-Obamcare forces have long sought to convince us would be the case.

How can this be true?

It’s really very simple.

Just because healthcare spending increased substantially in the first quarter does not mean that healthcare prices increased—a detail the GOP hopes you will miss. It simply means that more people were able to get the healthcare they were previously unable to afford; not that those of us who already had access to care had to pay more for that care.

Phillips sees the trend continuing, suggesting that the positive effects of Obamacare will boost the economy in 2015 and 2016.

I can already hear the haters out there getting ready to question this analysis with all their might. “What does Goldman Sachs know about the economy?” “Didn’t they almost take the economy down with their shady dealings?”

Goldman may , to quote Matt Taibbi, be a pack of ‘vampire squids’ but, when it comes to analysis of the economy, a reasonable person struggles to conclude they don’t know what they are talking about.

Sooner or later, folks, you are going to have to come around to acknowledging that those who latched onto an anti-Obamacare narrative—either for personal and political gain or because they just don’t get it—have been selling you a whole lot of snake oil.

To be sure, improvements need to be made in the law. This has always been the case with substantive legislation.

But the narrative that the ACA would mean everything from the death of the U.S. economy to the death of grandma at the hands of the death panels, is failing dramatically —and failing far faster than I had imagined would be the case.

Americans who have invested so deeply in hating Obamacare will not be quick to give up the ghost. But it is becoming increasingly clear that these folks are on the wrong side of history.”

Click here for the original op-ed.

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