4 ms·

Following this line of thinking, all or even more than all US GDP "growth" is attributable to wasteful medical and educational inflation.

mdorazio 8y ago
Not all, but a good chunk. Definitely less than half. Somewhere around 18% of current US GDP is healthcare spending [1], growing at around 5% year over year. Education spending is somewhere around 5% of GDP [2]. It's hard to figure out how much actual growth is occurring there since most of the ridiculous increases have been specifically in college, not in K-12 which is the bigger share. Total increase seems to be somewhere below 3% year over year growth. We can even add in military spending and not get to half. Thanks to this year's absurd 9% budget increase [3], military spending is now above 4% of GDP again. So, healthcare + education + military accounts for around 27% of GDP and about 5.2% weighted average growth for that 27%. US GDP is up 4.2% annualized for Q2 this year, so that growth in our 3 categories is only accounting for maybe a third of total GDP growth. [1] https://www.advisory.com/daily-briefing/2017/02/16/spending-growth https://www.advisory.com/daily-briefing/2017/02/16/spending-... [2] https://en.wikipedia.org/wiki/List_of_countries_by_spending_on_education_(%25_of_GDP) https://en.wikipedia.org/wiki/List_of_countries_by_spending_... [3] https://www.washingtonpost.com/news/wonk/wp/2018/06/19/u-s-military-budget-inches-closer-to-1-trillion-mark-as-concerns-over-federal-deficit-grow/?noredirect=on&utm_term=.49887612eeec https://www.washingtonpost.com/news/wonk/wp/2018/06/19/u-s-m...
- fspeech 8y ago
  The Q2 4.2% is too convenient a number to make your point. On average US GDP growth has been around 2% over the last decade: http://www.multpl.com/us-real-gdp-growth-rate/table/by-year http://www.multpl.com/us-real-gdp-growth-rate/table/by-year
  - mdorazio 8y ago
    And before that it was a consistent 3-4% average. Picking the decade following the largest recession in history as your base is also a bit convenient.

mdorazio 8y ago

Not all, but a good chunk. Definitely less than half. Somewhere around 18% of current US GDP is healthcare spending [1], growing at around 5% year over year. Education spending is somewhere around 5% of GDP [2]. It's hard to figure out how much actual growth is occurring there since most of the ridiculous increases have been specifically in college, not in K-12 which is the bigger share. Total increase seems to be somewhere below 3% year over year growth. We can even add in military spending and not get to half. Thanks to this year's absurd 9% budget increase [3], military spending is now above 4% of GDP again. So, healthcare + education + military accounts for around 27% of GDP and about 5.2% weighted average growth for that 27%. US GDP is up 4.2% annualized for Q2 this year, so that growth in our 3 categories is only accounting for maybe a third of total GDP growth. [1] https://www.advisory.com/daily-briefing/2017/02/16/spending-growth https://www.advisory.com/daily-briefing/2017/02/16/spending-... [2] https://en.wikipedia.org/wiki/List_of_countries_by_spending_on_education_(%25_of_GDP) https://en.wikipedia.org/wiki/List_of_countries_by_spending_... [3] https://www.washingtonpost.com/news/wonk/wp/2018/06/19/u-s-military-budget-inches-closer-to-1-trillion-mark-as-concerns-over-federal-deficit-grow/?noredirect=on&utm_term=.49887612eeec https://www.washingtonpost.com/news/wonk/wp/2018/06/19/u-s-m...

fspeech 8y ago
The Q2 4.2% is too convenient a number to make your point. On average US GDP growth has been around 2% over the last decade: http://www.multpl.com/us-real-gdp-growth-rate/table/by-year http://www.multpl.com/us-real-gdp-growth-rate/table/by-year
- mdorazio 8y ago
  And before that it was a consistent 3-4% average. Picking the decade following the largest recession in history as your base is also a bit convenient.