Last Updated on Thursday, 28 June 2012 08:40 Written by dbhalling Thursday, 28 June 2012 08:40

---

The Supreme Court has ruled that Obama Care is constitutional.  This is an unprecedented increase in government power which will shorten American lives much as a law requiring forced smoking would.  This law will hurt innovation in health care by co-opting the market mechanisms for creating new technologies and by co-opting funds from the private market.  As a result, we will see fewer new drugs, fewer new medical devices, and rationing of care.  The USA has been the leader in developing new medical technologies and that will end unless this law is repealed and will hurt the medical care and longevity of people around the world.

Longevity is directly correlated to GDP (Gross Domestic Product) per capita, as best illustrated in this GAPMINDER World interactive chart.  The chart allows you to see how changes in GDP per capita from 1800-2011 have affected longevity for over 100 countries.  Government spending as a percentage of GDP is inversely correlated with economic growth or increase in per capita GDP.  The paper “Government Spending and Economic Growth”  definitely shows that higher level of government spending leads to reduced economic growth.

 Evidence from a sample of 23 industrial countries and a larger sample of 60 countries indicates that a 10 percent increase in government expenditures as a percentage of GDP leads to a one percentage point reduction in the rate of growth of  GDP.

In the United  States, the GDP growth  rate has fallen  from  an average of 4.4 percent a year in the 1960s to an average of 1.9 percent a year in the 1990s. In Japan, where government expenditures grew from 17.5 percent of GDP in 1960 to 36.9 percent in 1990, the GDP growth rate fell from an average of 10.6 percent a year in the 1960s to 2.2 percent in the 1990s. The evidence clearly links these lower GDP growth rates with higher levels of government expenditures.

If the United States had kept its level of government expenditures as a percentage of GDP at the same level it was in 1960, real GDP in 1996 would have been 20 percent higher, and the average annual income for a family of four would have been $23,440 higher than it actually was.

To maximize economic growth, government expenditures as a share of GDP should be no more than 15 percent, which is far less than half the current level.

 

Combining the GAPMINDER chart with the conclusions from the paper on economic growth and government expenditures, results in the conclusion that higher government spending has shortened the average American lifespan by about five years compared to where it would be if spending levels as a percentage of GDP had stayed at 1960 levels.  Obama Care further expands government spending and will result shortening longevity much the same as a law requiring forced smoking.