Rick Ungar, Forbes:
“The news just keeps getting better and better for
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
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
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.”
for the original op-ed.