Submitted by Charles Hugh-Smith of OfTwoMinds blog, [5]
So what happens when an insatiable state-mandated cartel attaches itself to households with declining real incomes?
Why the coming Great Recession is brought to you by the Healthcare Cartel is painfully simple: in an era of stagnant household incomes, every additional dollar devoted to rising healthcare insurance, outrageously unaffordable medications and soaring co-pays is one less dollar that's available to be saved, invested or spent on something other than healthcare.
Recent headlines tell the story: off-patent medications suddenly leap in price, healthcare premiums jump 25+% in a single year, co-pays increase and the deductibles on many insurance plans are so high that the coverage is more phantom than real: if you have to spend $5,000 before your insurance plan pays $1, what value is the coverage?
If the plan costs $5,000 a year, but doesn't pay a dime of expenses until you've spent $5,000, then the plan actually costs $10,000.
No wonder rising healthcare costs are tightly correlated with recessions, as longtime correspondent B.C.'s chart reveals: as healthcare expenses consume more oxygen, the rest of the economy starts gasping for air:
Total healthcare expenditures are generally under-estimated, distorting the full consequences of soaring healthcare:
Adjusted for inflation, healthcare expenditures have risen 55% since 2000:
Compared to our developed-nation competitors, the U.S. spends an inordinate amount of healthcare spending on the elderly. Why? because it's so profitable, and the federal government pays the bills, no questions asked--even when the billing is fraudulent or inflated, or the medications and procedures are needless or even harmful.
So what happens when an insatiable state-mandated cartel attaches itself to households with declining real incomes?
There is less money to spend in the rest of the economy, which stumbles into recession.
