Over the weekend, poor and biased media reporting, dysfunctional politics, blindly ambitious activism, and economic ignorance fed on each other to produce a phenomenally false narrative that went out to hundreds of thousands if not millions of people. The result not only doesn't pass the smell test; it fails the stench test from a mile away.
The first origins of the activist narrative burst forth during Friday's PBS News Hour, when the network's Betty Ann Bowser opened her report on health care costs with two sentences that belong in the Sloppy Statement Hall of Shame (bold is mine):
Health care spending devoured 17 percent of the entire economy last year, about $2.5 trillion. That's the biggest one-year growth since record-keeping began in 1960, according to projections from the Federal Centers for Medicare and Medicaid Services, or CMS, this week.
Huh?
If you don't mind my asking -- What exactly is the "that" to which Ms. Bowser referred?
Could she have meant the "biggest one-year growth" in current-dollar health care costs? If so, I found in my review of data downloaded from the relevant link ("NHE Historical and projections, 1965-2019") at this CMS web page that this is a barely true assertion. The 2009 cost increase of $133.461 billion slightly edges out the $133.171 billion seen in 2002. But such a stat is meaningless without some kind of reference to inflation. I found that the dollar amount of cost increases after taking inflation into account were greater in five other years between 2001 and 2008 than they were in 2009.
Did the reporter, whose News Hour work on health care "just so happens" to be part of a "project" funded by the left-leaning Robert Wood Johnson Foundation, mean to refer to the rate at which costs increased during the past year? I hope not, because the 2009 rate of increase of 5.7% was lower than 38 of the other 43 previous years (1966 through 2008) listed in the downloaded file. Ah, but to be consistent, we should also look at the inflation-adjusted rate increases. Doing so is of no help to Ms. Bowser; 36 of the 43 previous years had higher real health care cost growth rates than the 3% the country experienced in 2009 (5.7% minus 2.7%).
Or did she really mean to tell us, as is indeed the case, that the percentage of gross domestic product (GDP) "devoured" by health care (the raw percentage, not its change) was the highest on record? If so, she had a funny way of expressing it.
The final possibility that is factually correct -- and the one I believe the poor woman meant to relay to her audience -- is that the one-year percentage-point increase in GDP taken up by health care "costs" (I would prefer to refer to them as "services provided") was the highest ever. That is a fact, thanks largely to what I have been calling the POR (Pelosi-Obama-Reid) economy since the summer of 2008. During the two years containing what also turned out to the POR recession as normal people define it, health care costs as a percentage of GDP indeed rose:
My review indicates that the 1.14-point increase in health care costs as a percentage of GDP in 2009 is indeed the largest on record. But it is not the biggest percentage increase in the percentage. Expressed in those terms, the 2009 increase of just over 7% (1.14% change divided by 16.20%) is less than 1982, when health care's share of GDP went from 9.39% to 10.17%, a percentage increase of about 8.3% (.88% change divided by 9.39%).
Some of us remember 1982. What it had in common with 2009 is that the economy stunk. The real impact of Ronald Reagan's Democrat-delayed supply-side tax cuts didn't kick in until the next year. In both 1982 and 2009, the health care sector kept GDP from sinking further. In 2009, it was one of the very few areas in the private sector where total employment actually increased. Yet Betty Ann Bowser breathlessly blasted this as a bad thing, when the real culprit is this administration's misguided attempt to revive the rest of the economy through historically disproven spending "stimulus" instead of employing the historically effective steps taken by JFK, Reagan, and Bush 43, i.e., cutting marginal tax rates on labor and invested capital.
In any event, it seems likely that Betty Ann Bowser, who used her opening statement as a launch point for barely disguised statist health care advocacy, knew what she wanted to say. It may be more accurate to assert that the folks at Robert Wood Johnson knew what they wanted her to say. Regardless, the end result is that she said it horribly.
Then the Obamabots at Organizing For America (OFA) went further, serially abusing Bowser's already tortured statement.
The poor souls at OFA are desperate to find some way, any way, to help Dear Leader take over health care while proving, despite clearly declining energy and enthusiasm, that they are still relevant. In less than 24 hours, seemingly without thinking or even blinking, Mitch Stewart of OFA produced an absolute howler of an e-mail that began as follows (bold is in original):
Tom --
An alarming new study shows that health care costs increased last year at the fastest rate in more than a half century.
Health care spending rose to an estimated $2.5 trillion in 2009, or $8,047 per person -- and is now projected to nearly double by 2019. If we don't act, this growing burden will mean more lost jobs, more families pushed into bankruptcy, and more crushing debt for our nation.
The conclusion is clear: This isn't a problem we can kick down the road for another decade -- or even another year. We need to pass health reform now.
Mitch's rich pitch fell firmly into the ditch.
A new "study"? Mitch my man, the info comes from a routine annual government report. Or did you think it really came from your buds at Robert Wood Johnson?
Although I understand how easy it might be to misinterpret Betty Ann Bowser's opening News Hour statement, the people at OFA must be collectively leading incredibly sheltered lives if they can't recall the double-digit percentage increases in annual health care costs that routinely occurred from the mid-1960s until the early 1990s -- increases that make the OFA e-mail's first-sentence claim so obviously absurd. (Hmm .... isn't the mid-1960s when Medicare started? Why yes, it is. What a non-conincidence.)
There's no way an embarrassing sentence like Mitch Stewart's opener should have gotten past an organization allegedly run by informed, educated adults. But it did. And they and their ilk want to be in charge of everyone's health care? Pass the tea.
Cross-posted at BizzyBlog.com.
