Debt fueled consumption

Oh those profligates. Those spend-spend-spenders. No wonder the American economy is on the rocks. Consumer debt! Runaway consumption! Credit-card crazy!

Turns out, the big new source of personal debt is likely related to health care.

the debt-fueled consumption was more likely paying surging health care bills than buying cute kitchenettes.


A picture tells a thousand words.

Comments

Grains of salt

Any chart or graph can be a big fat lie, including the on in this article. I'm not smart enough to know what's true. But it seems reasonable to link health care spending to financial risk and economic instability in general. The industry has been on a binge for a long, long time.

Health care costs responsible for economic instability

I agree with you James, health care spending can easily be linked to financial risk and economic instability. More people have been living off of credit cards and taking second mortgages out on their homes because they have had to pay for health care and insurance costs than ever before. The fat cats sitting in the penthouse offices in insurance companies have been on an eating binge for years and have bled families dry. I liken them to vampire mythology, they have ravaged the poor and middle class and still want more power and more control.

See Elizabeth Warren

"The Coming Collapse of the Middle Class." Similar analysis.
http://www.youtube.com/watch?v=akVL7QY0S8A

Men's incomes have remained flat. Family income over the last generation rose only because women went into the workforce. The biggest component of the cash squeeze, she says, isn't spending on cars, appliances or eating out. It is health care, child care (which wasn't a cost factor in the age of the stay-at-home mom) and housing. But people weren't simply consuming bigger homes over the last decade; they were buying better schools for their kids.

Thank you for the link. I am

Thank you for the link. I am amazed that the cost of health care hasn't been a bigger component of this debate. One would think that would be a major selling point.

Replace Personal with Governmental

Turns out, the big new source of personal debt is likely related to health care.

So, now instead of personal debt, we'll make it governmental debt! Obama's budget plan has the national debt at $23+ trillion in 2019.

Keep on spending! We'll just print more money.

Great Point

Better to do nothing and ensure an economic collapse that would make this current recession seem easy and happy.

Great Idea!

"Keep the Faith"

Idiocy knows no bounds

When there are things being presented by our government to actually help our citizens yet are imperfect, we continue to see people rejecting the effort. I agree, Blue South, that we must make sure that we don't have a complete economic breakdown in America. We're just being subjected to so much that can and will bring our country down if not handled correctly. Obama appears to have a handle on this and is doing what he believes he knows to be best to stay away from economic collapse in America. We just have to stay his course. What other option do we have, actually?

Ignorance of economics knows no bounds on this site

When there are things being presented by our government to actually help our citizens yet are imperfect, we continue to see people rejecting the effort.

Why not just print off $100 trillion dollars and give some to everyone? I guess that would "help our citizens", right? Can you even formulate an argument against increasing the national debt?

On top of that, you really think our government gives a rat's ass about it's debt-slaves, er, "citizens"? How can a fully-grown adult human being even believe such a fairy tale when the evidence that government has been hijacked by corporate interests abounds!?! I bet you are one of those people who actually believe that the government bailout of Wall Street was designed to protect you! It's like stealing candy from a baby! What package of lies can't they sell to you?

I agree, Blue South, that we must make sure that we don't have a complete economic breakdown in America.

Actually, there is a group of economists who have been trying to prevent an economic collapse for years, and who accurately predicted precisely the mess that we're in now: the Austrian school of economics (Ludwig von Mises Institute). Of course you probably never paid any attention to them because the places you get your information don't think highly of anyone actually willing to question the motives, the wisdom, or the authority of our national institutions such as the Federal Reserve System and Congress.

I mean, your statement is just laughable. How can a group of dipshits, such as those that have infested our nation's capital for the past several decades, have any ability to "prevent an economic collapse" when they not only did NOTHING to prevent the largest financial crisis in world history but also contributed to it?! Having faith in these people is worse than believing in Santa Clause! And you wonder why we should even have to worry about a collapse - it's because we have a nation of sheep lead by a pack of wolves.

Obama appears to have a handle on this and is doing what he believes he knows to be best to stay away from economic collapse in America.

Right, because you know that Obama really wants what's best for the little guy - that's what Oprah said, right? Please turn your brain into the ON position for heavens sake. This is like listening to someone who takes professional wrestling or reality TV seriously. Obama doesn't care about the little guy. No politicians care about the little guy. Repeat that as many times as it takes to SINK IN. If a politician did really care about the little guy, he wouldn't get elected. What would get him elected is pretending that the little guy mattered to him while corporate money propels him to the desired position.

Don't believe me? Look at his g damn voting record! Look at it. Really. Look at it. Look at the people in his administration. Look at the top corporate donors to his campaign. Look at his foreign policy. Or does reality not matter to you? "Oh, but I just don't see how our leader could be at fault. He is so virtuous and admirable. He would never do us harm." It's like living in North Korea listing to some people defend their glorious leader Obama. I mean, he could probably get away with doing the exact same things as Bush and you'd still praise him and loyally defend his every action.... oh wait, he has been doing the exact same things as Bush, and you are still defending him! Ahahahahaha

We just have to stay his course.

the punch line to your post

ahahahahahahahahaha

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"The natural wage of labor is its product." -- Benjamin R. Tucker
A liberal is someone who thinks the system is broken and needs to be fixed, whereas a radical understands it’s working the way it’s supposed to.

Shorten your rant next time

Just post a link to a Hayek treatise, then trash Keynes and Krugman.

Do you seriously believe many on this site are pleased with Obama's bowing to Geithner's continuation of government by Goldman Sachs?

But by all means, don't offer any real solutions like reducing the Pentagon's budget by $1T over the next 10 years to cover the most widely tossed around cost of health care reform (setting aside whether thanks a reasonable approx of cost at all).

Who is talking about printing $100 trillion without saving money or reducing costs elsewhere? No one.

 

Not for posts like that.

Some of what you say is true for many on this site, but there are also a lot of political cheerleaders I can't help but disparage for their contribution to this terrible system.

I've already posted a huge list of reforms I would like to see which wasn't well-received here (including an 80-90% slash in so-called "defense" spending).

I ask those who defend this deficit spending to argue against a $100 trillion dollar debt for the same reason I ask defenders of national minimum wage laws to argue against a $30/hour minimum wage - it forces them to recognize economic reality. I'm not suggesting that anyone would actually favor these things.... in fact I'm suggesting that the fact that no one would favor these things illustrates an underlying and largely unrecognized truth about reality.

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"The natural wage of labor is its product." -- Benjamin R. Tucker
A liberal is someone who thinks the system is broken and needs to be fixed, whereas a radical understands it’s working the way it’s supposed to.

Debt-fueled consumption?

But all the liberal economists are arguing that consumer spending is a good thing?!?! That it's what "boosts" the economy. Are they wrong??? Don't we need more people buying shit they don't really need in order to get us out of the depression? Doesn't consumer spending drive healthy economies?! Or is CNN full of it?

Of course they are. But the real culprit of this whole mess won't be willingly identified on this website, because few here would even be willing to acknowledge the true reason in the rise of prices. Actually, I'd like to see someone try to explain the reason for the rise in prices in health care.

Keep in mind that in other "dangerously" unregulated industries such as electronics, consumer prices have fallen sharply. Even within the medical industry, things like plastic surgery and laser eye surgery have fallen in price while increasing in affordability and availability. Gee - I wonder why that is. Well, of course truly free-market economists have a perfectly sound and straight-forward explanation for this, as well as for the absurd increase in the cost of most health care, but what do you, the haters of voluntary exchange, propose as the culprit?

Lemme guess - "greed"? While I would expect that answer from a class of 7th graders with no background in economics (thank you public fool system), I'm hoping that the progressives on this site can come up with something better.

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"The natural wage of labor is its product." -- Benjamin R. Tucker
A liberal is someone who thinks the system is broken and needs to be fixed, whereas a radical understands it’s working the way it’s supposed to.

Who said do nothing?

I certainly don't advocate doing nothing, but is doubling down on Bush's failed economic policies the answer?

Bush doubled the debt to $10+ trillion, liberals screamed and conservatives were silent.

Obama wants to double down on that to $23+ trillion, conservatives scream and liberals are silent.

Just as pushing the .com bust into real estate brought us to our current crisis, pushing the real estate bust into government debt is gonna bring even more pain down the road.