Friday, July 8, 2011

Federal Health Spending from 1962-Present

This post will explain how spending for government programs can increase drastically from their original intent.

In 1962, federal monies spent on health care programs was 2.3 billion (0.4% of GDP). By 1980 (remember the 70s was extremely volatile), we spent $65 billion (2.4% of GDP).

During the conservative Regan era federal spending for health care went to $145 billion (2.9% of GDP).

Even the great Clinton years saw a large increase in spending: by 2000 they spent $388 billion (4% of GDP).

The Bush years saw a drastic increase in health care spending (at least in terms of percentage of GDP): it went from 4.2% ($428 billion) in 2001 to 5.2% ($750 billion) in 2008.

Thus Bush spent increased federal health care spending by over 25% during his reign. Once again, probably not the best "conservative" (at least fiscally).

So, to sum it all up, federal health care spending went from about $2.3 billion in 1962 (0.4% of GDP) to $916 billion in 2010 (6.3% of GDP).

Yet, the federal government has no role in the health care market? Remember, in another post I wrote, total health care spending in the U.S. (both government and non-government) was $2.5 trillion. Is this a free market? or are these federal payments subsidies that likely increase the costs of care? The federal government does, after all, make up almost 40% of health care spending in the U.S.

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