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yep, health care reform to single payer will basically guarantee a recession - a huge percentage of GDP/jobs will evaporate over the course of the transition.
by maximente 7y ago
yep, health care reform to single payer will basically guarantee a recession - a huge percentage of GDP/jobs will evaporate over the course of the transition.
there is no such thing as having this cake and eating it too: there will be immense pain for a sizable part of the economy whenever this gets tackled.
- abfan1127 7y agoWhile those who are negatively affected by the reform would suffer, that money doesn't evaporate. It goes elsewhere, so it wouldn't cause a recession on a macro scale. Look into the Broken Window Fallacy in Economics in One Lesson. its a great book.
- JamesBarney 7y agoThe money doesn't evaporate, but it very likely would result in less total money spent. And people spending less money is the textbook cause of recessions.
- abfan1127 7y agoif its not spent, its saved somewhere. Very few people put substantial amounts of cash in their mattress. Most goes in the bank, which helps set the rate if interest rates for loans. So, even unspent money goes somewhere and gets spent. Still not a recession.
- JamesBarney 7y agoThe problem is near term interest rates are near 0, so the casual pathway of money saved -> lower interest rates -> more investment isn't as effective. This is why quantitative easing has so little impact. And a saved dollar is spent less than a spent dollar.
- abfan1127 7y agolow interest rates are supposed to provide information regarding the value of money spent vs. money saved. However that function isn't allowed to work. Further quantitative easing add(s|ed) further noise to the flow of money from investment to spending.