No, Obamacare Didn’t Tank the Economy Last Quarter


For some reason, there’s been a fair amount of attention paid to the impact of Q1’s decline in health care growth on the latest GDP numbers, which were pretty dismal. The Wall Street Journal even figured out a way to blame it all on Obamacare. This is nonsensical, and in any case, the question of what happened is almost certainly pretty simple. Here’s Dean Baker:

The NYT noted that a sharp drop in health care spending reduced the first quarter growth rate by 0.16 percentage points. It is important to recognize that this drop followed a surge in health care spending reported for the fourth quarter of 2013 that added 0.62 percentage points to growth in quarter….It is likely that the data overstated the actual increase in spending in the fourth quarter and therefore also overstated the drop in the first quarter. The average impact of health care spending on growth for the two quarters taken together is almost the same as over the prior four quarters.

Yep. I’ve illustrated this with a gigantic diagram showing raw health care expenditure figures below. In short, the Q1 decline is almost certainly just statistical noise. Pay no attention to the hyperventilating.

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is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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