High GDP Numbers for Q3? We Can Thank Obamacare and Forced Consumer Spending

Examiner.com ^ | December 23, 2014 | Kenneth Schortgen Jr

[Son House]

The revision which helped create last quarters incredible growth was the forced mandatory costs incurred by the American people from the Affordable Care Act (Obamacare), which accounted for two-thirds of the entire boost in consumer spending. Consumer spending, as opposed to the recording of revenues from actual production and industry which used to be the primary components of economic growth in America, on average accounts for more than 70% of the entire Gross Domestic Product. And if you took out payments made by the American people towards mandatory government healthcare, GDP may have been in negative growth for last quarter, just as an Obamacare revision changed the first quarter's number from a negative to plus 4%.

Using a myriad of messages, such as telling citizens they will be stuck paying massive fines for not registering for nationalized healthcare, many Americans used large portions of their discretionary spending and savings to pay for services and insurance that on average is much higher than what they paid for prior to Obamacare's passage in Congress.

To prop up artificially created GDP numbers, government agencies are now using just about anything to assure that the public and the markets do not realize the true state of the economy.

And in the U.S., the BEA is doing the same, only instead of counting and reporting the actual components of America's Gross Domestic Product, they are simply waiting until all numbers are in and then revising those numbers higher using new additions that were not previously counted, such as the doubling down of insurance sales which have been forced unto the public at a time when the real economy is screaming a deep recession.

[grania]

Got it. The GDP is up because people are forced to hand over more money to insurance companies.

I am Alice and this is Wonderland.

[ForYourChildren]

We’ve been grubered!!

[AZLiberty]

I wondered about the “price of gas” explanation. If people save money on gas only to spend it on other goods and services, then it increases the amount spent on those goods and services, but it reduces the amount spent on gas. To first order, the effect on the GDP should be a wash.

Perhaps lower energy costs stimulates spending beyond the immediate savings from fuel. For example, people might be inspired to buy a new SUV if they thought energy prices were going to remain low for a time. Or they might decide they can pay a higher mortgage payment so they trade up to a bigger house. Or an industrial company might decide to buy new equipment based on their energy savings.

Or, as this article suggests, the growth is illusory, stimulated by greater mandated spending on health care.

[Chode]

good points all... i believe anything other than lower unemployment or job growth

[AZLiberty]

I should have put “health care” in quotes in my previous comment. The money goes not to health care but to more expensive health insurance.

[Chode]

i.e. a FOB's pocket...