Was health care about 9% of GDP in 1960 in the US? College costs, including tuition, seem to have followed a similiar trajectory since 1960 (college was a lot cheaper when fewer people wanted to go--you could get a good paying factory job instead of going to school.) The pattern I see is that things with inelastic demand (ie necessities, not luxuries) cost more as productivity improves. The market players with pricing power increase their share of GDP while those with less pricing power see their share reduced. The Federal Government has pursued policies that weaken the pricing power of workers; so the result is what we are seeing.
I once asked Mary Sue Coleman (the current President of the University of Michigan) the following question on a call-in radio show, "Dr. Coleman, given that the cost of tuition went up by a factor of 2.5 times in real terms between 1975 and 2002, what value added services do students get today (2002) that they did not get in 1975?" This was the answer, "Lots of things." This woman is President of a major university, holds a Phd along with numerous awards and that is all she can muster; she did not go on to elaborate in any detail what she meant by "Lots of things" so we can safely assume that there is really hardly any difference. What she did do was try to dodge the question by claiming the State of Michigan had reduced their subsidy (true, but the increses in tuition more than compensated for any reductions in state money.)
Chuck ----- Original Message ----- From: "Doug Henwood" <dhenwood at panix.com> To: <lbo-talk at lbo-talk.org> Sent: Tuesday, October 06, 2009 4:32 PM Subject: Re: [lbo-talk] overconsuming health
>
> On Oct 6, 2009, at 4:21 PM, James Heartfield wrote:
>
>> I belive that Britain spends about half what the US spends on health.
>
> Almost - about 9% of GDP for the UK vs. 17% for the US. See graph at
> bottom of:
>
> <http://www.leftbusinessobserver.com/Consumption.html>.
>
> Doug
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