Back To The Economy

A question for the bullish readers out there, if there are any. Now that GDP is around 1%, what gets the economy going again?

1 comment:

Anonymous said...

Healthcare. I call it the Terry Schiavo economy, where the government allows hospitals and nursing homes to keep comatose old people and severely defective babies alive forever on live support. The real beauty of healthcare is that it is evenly distributed--something for every Congressional district--and very labor-intensive. Dismiss any and all talk of bringing government healthcare spending under control. Nothing will be done about until unemployment is back down to 5%. Any attempt to rein in government spending will raise the cries of death panels and rationing.

There might be something done to control costs paid by the private sector, on the other hand. And I also expect that mandate for people to buy insurance to be replaced by a free voucher to buy insurance. Obviously, in the long run, those with money pay more taxes to subsidize the vouchers for the poor, so the effect is similar to that of the mandate, but less obvious. The Republicans will make this change as soon as they get into power.

So there'll be plenty of volume in healthcare in the years to come. Not so sure about the profit margins. Given the amount of government involvement, it could turn out to be a profitless boom, with all the money paid out as salaries and nothing left for the shareholders.