I'm not sure what this says about my priorities, but I spent a good portion of today scratching my head over this line from Mitt Romney's nomination-clinching victory speech last night:
With Obamacare fully installed, government would have control of almost half of the economy, and we would have effectively ceased to be a free enterprise society. This president is putting us on a path where our lives will be ruled by bureaucrats and boards, commissions and czars. He's asking us to accept that Washington knows best, and can provide all.The thing that confused me about this wasn't so much that Mitt Romney said the survival of America's economic system is on the ballot in November (I've grown accustomed to Republicans crying wolf), but rather because Romney said the reason its survival is at stake is that Obamacare threatens to put government in "control of half the economy."
Obviously, the first thing that came to mind is that if Mitt Romney really believes Obamacare is so bad, then why did he pass it into law in Massachusetts? But beyond that, the "half the economy" claim seems so outlandish that I couldn't believe it could possibly be true.
And it turns out that it's not true. Not even close.
Health care isn't half the economy, nor is it projected to be. According to the most recent report from the Center for Medicare and Medicaid Services, health care spending is currently 17.6 percent of GDP and will rise to 19.8 percent in 2020. Even if government controlled all health care spending, that's still nowhere near half the economy.
But government isn't responsible for all health care spending. According to the CMS report, by 2020 the government will be responsible for 49 percent of health care spending. That's not 49 percent of the economy, it's 49 percent of 19.8 percent of the economy. And that translates to a little less than 10 percent of the overall economy.
One-tenth of the economy is nowhere near Mitt Romney's claim, but some people might think it sounds like a lot. Today, however, government is responsible for 45 percent of health care spending (up from 44 percent in Bush's last year in office), so 49 percent isn't a huge shift.
But as I said above, 49 percent represents one-tenth of the economy, not one-half. Still, at least it's one-half of something, and if I had to guess where Romney's false claim came from, I would guess that he (or someone on his staff) saw that number when it first came out, and over time it metastasized into the falsehood he delivered last night. That's just a guess, though. Maybe there's another story. Whatever it is, the ludicrous nature of Romney's claim betrayed his reckless disregard for the truth and underscored his willingness to say anything in order to make an argument for why he should be elected.
Imagine for a moment that Romney had used the facts. Here's what he would have said:
With Obamacare fully installed, government would have control of almost one-tenth of the economy, and we would have effectively ceased to be a free enterprise society. This president is putting us on a path where our lives will be ruled by bureaucrats and boards, commissions and czars. He's asking us to accept that Washington knows best, and can provide all.Imagine, moreover, that he said this was because government's share of health care spending would have increased from 44 percent under Bush to 49 percent with Obamacare in place. Anyone within earshot would have been rolling on the floor at the notion that such a small shift could destroy the American economic system. Romney would have basically been making the argument that America's survival depends on a rounding error. He would have been laughed out of town. So instead of using the facts, he either made them up or just didn't bother to find out whether what he was saying was true. I'm not sure which scenario is worse. But I do know that if he'd used the facts, we'd all still be in hysterics.
2:41 PM PT: nextstep takes a shot at explaining Mitt's thinking and comes up with a sensible answer: Romney is basically adding all non-governmental spending to government spending, which is a totally different kind of bullshit than I had surmised. Using OMB numbers, all government spending in FY2011 was 35 percent of the economy. That includes government health care spending, but Romney says Obamacare puts government in charge of all private health care spending. So he adds about 10 percent to the 35 percent figure and gets "almost half." There's two obvious problems with this: first of all, Obamacare doesn't dramatically expand government's power over most private health care spending. There's already a ton of regulation, and most of what Obamacare does in terms of private health care spending is in the individual market, which is a small slice of the pie. Secondly, government spending as a share of GDP will fall over the next few years from 35 percent down to about 30 percent, the historical norm, as the economy grows. Between those two things, Obamacare's expansion of governmental power is quite modest, both in terms of percentage of the economy, and also in terms of the substance of what it does.