Universal Health-Care Serving As A Fiscal Stimulus

MIT economist Jonathan Gruber wrote a op-ed for the NYT arguing that health care reform would actually be a great way to stimulate the economy.

"Given the present need to address the economic crisis, many people say the government cannot afford a big investment in health care, that these plans are going nowhere fast. But this represents a false choice, because health care reform is good for our economy."

When people have health insurance, Gruber says, two things tend to happen. The first is that they purchase medical goods and services. The second is that they spend more money on other things, since they no longer have to put aside money to pay for medical emergencies. (Gruber's own research has shown this.) Either way, the money is going right back into the economy and promoting growth.

Jonathan Cohn at The New Republic agrees with Gruber noting:

"Here's one, slightly oversimplified way to think of it: Health care reform would help the economy in the short term--by increasing spending on medical care. It would also help the economy in the long term--by reducing spending on medical care. Pretty neat, huh?"

Very neat. Universal health-care serving as a fiscal stimulus is where it's at.

UPDATE: Via Ezra Klein:

In 2006, adjusted for purchasing power, the United Kingdom spent $2,760 per person on health care. America spent $6,714. It's a difference of almost $4,000 per person, spread across the population. That's $4,000 that can go into wages, or schools, or defense, or luxury, or mortgage-backed securities.

Source: The New Republic