According to Irwin, the pace of economic growth of the United States is uncertain in this year, due to the massive investment in the healthcare by the President Obama administration. The investment in the health care is about one-sixth of the total budget of the economy. The reforms aim at providing access to healthcare to millions of American who don’t have healthcare insurance and improve the efficiency of the health care by making it cost effective.
As a result, the spending on the health care drops by a big margin. Hence, due to this none spending on the health care, the economy in the first three months has shrunk by 2.9%. Although the health care spending does not have a major effect on the general economy compared to other sector, the drop in health care spending made the growth of the G.D.P drop by 0.16%. The author acknowledges the country is recovering from the recession and the drop in the GDP makes the future growth of the economy uncertain. Additionally, the statistics have not shown an increase in spending in another sector of the economy. Thus, making it even hard to judge if the money saved on health care is spent on another sector of the economy.
Analysis of the article
The country has recently come from a recession hence it’s expected that the economy will not grow fast. The recession caused unemployment and closer of many businesses. Thus, reforms in the healthcare act as a boost to alleviate the citizens from the burden of the health care cost. The huge number of number of the unemployed population is also a burden to the employed population. This is because the employed have to support the family members who are unemployed in terms of food and clothing. Thus, the effect on the savings on the health care cannot be felt since the little money saved is used to care for the unemployed.
Since the analysis of the effect on the spending is just three months, thus, it’s too early to judge the effect. However, the author failed to mention where the funding for the reforms comes from or how it is funded. The government could have increased the taxes. Hence, the money saved on spending on the health care is spent on paying the increased taxes.
The question to the article
Is the reform in the health sector the real cause of the drop in the growth of the economy?
Works Cited
Irwin, N. "Log In - The New York Times." The New York Times - Breaking News, World News & Multimedia. N.p., 27 June 2014. Web. 9 Dec. 2014. <http://www.nytimes.com/2014/06/28/upshot/our-economic-growth-is-a-mystery-obamacare-is-the-reason.html?abt=0002&abg=0>.
