Remember when the Supreme Court decided that Obamcare is legal but it’s a tax? Well, the nuances were irrelevant, but when it comes to the Bureau of Economic Analysis they could not have been greater: by effectively counting a tax as part of US economic growth, Obama, the Supreme Court and the US government’s beancounters assured themselves of a steady stream of “economic growth” for quarters to come, and sure enough, Q1 was no different.
As regular readers know, when it comes to the one constant source of US economic growth, nothing is more reliable than Healthcare, which is merely another name for how Obamacare figured in the bean-count reports. And, we are confident, it will come as no surprise that in Q1, when real GDP grew by $44 billion in real terms, or 1.1% annualized, from $16.471 trillion to $16.515 trillion, Healthcare was responsible for $26 billion (rising from $1,896 billion to $1,929 billion annualized) or a whopping 58.4% of the total.
This was revised strongly upward from the last number, which had Healthcare rising by $15 billion less, to “only” $1,907 billion.
Putting this number in context, the Q1 increase was the third biggest quarterly increase on record, the second largest in the past decade, and as the chart below shows the surge unexpectedly comes at a curious time, just as the quarterly increases in healthcare spending were supposedly trending lower.