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The Engine of US Jobs
eberta writes, "BusinessWeek has an interesting take on the US job situation, What's Really Propping Up The Economy. I think many of us have felt the US tech job market was stagnant and this article has insights into why this economy is so hot, yet not from our perspective. The spoiler is the business of health care — which will come as no surprise to anybody who has looked through the help wanted section lately. BusinessWeek has some opinions on how IT should play a bigger role in the health care industry."
The economy may be "hot" with jobs, the problem is that it's not hot with *well paying jobs*. Between the IT bubble bursting, offshoring, the decline of unions, and stagnant minimum wage, it's not exactly the garden of opportunity in the U.S. And before I get some elitist comment like "there are good jobs out there, you just have to get off your lazy butt and look", yes I know there are good jobs, there just aren't many to go around, no matter how good a worker you are.
... we reach a point where the health care services the population reasonably wants exceed the ability of the population as a whole to pay? What if this is happening now? The article hints at this--it is pointed out that the US trade deficit might be viewed as us borrowing foreign money to fund our collective health care. Perhaps some of this spending is currently just due to low efficiency of the health care system, but it's quite possible we could fix that, and, in 10 years, increases in costs would put us back where we are now.
Factors contributing to rising demand for health care:
1) Aging population. Even in the US, which has one of the highest birth rates of any western country, the population as a whole is getting older. With the baby boomers about to retire, this is going to hit us hard and fast.
2) Obesity and other dietary/behavioral risk factors. There's been a bit of evidence that the negative consequences of obesity were overblown, but it's still bad news.
3) The most subtle and nefarious of all: advances in medicine. There's not really any demand for drugs that haven't been discovered yet, or surgeries that can't yet be performed successfully.
This last point is the scariest of all. Suppose we developed a way to give people an extra 10 years of life, but it cost a million dollar per person. We simply couldn't afford to provide it for everyone. What do we do? The American solution is to offer the procedure to anyone who can pay for it. The Canadian way would be to have a 90-year wait list so most people died before they could get the procedure. Other countries would perhaps find other ways of rationing health care, but the point is that the inevitable consequence would be rationed health care. Maybe the market would do the rationing, maybe the government would, maybe the Grim Reaper would, but rationing there would be.
So, what do people think? Obviously, we should try to make health care more efficient, but, if it's too expensive to give everyone full access, how do we sort things out?
Healthcare does not really build value. Nothing has been made because Aunty Tilly got a $20,000 bypass instead of a $5 bottle of asprin.
In the way economists measure things, the Exxon-Valdez disaster was a huge economic success.
One thing that really drives up the GDP is esculating housing costs. When a $100k house's value increases to $300k this is seen as a $200k increase in the economy.... but this is just bullshit, no value has been created. Sure it can stimulate the economy because Aunt Tilly can now take a $20k loan against her house and get a bypass and this trickles into the economy. Or Joe Sixpack might buy a new Chevvy... However, you should really see this as what it is: hyper inflation in housing prices.
If the "value" of a loaf of bread increases from $1 to $5, then that is seen as inflation, not growth. When a house goes from $100k to $300k this should be seen as inflation too.
Engineering is the art of compromise.
Easy. Why do you think the US is one of the proponents of IP and copyright? Because that's all that's left in its industry: Content.
Agriculture is heavily subsidized. As in many/almost all "western" countries. In other words, a lossy business for the state. It's kept running to remain at least in a moderate way able to sustain itself, just in case the world starts treating them like, say, Cuba and shuts down international trade (or in case some country/ies decide it's fun to sink ships going for US harbors). It's a war insurance, if you want. And many other countries do exactly the same.
Productive industry is pretty much in the same boat. From cars to consumer products, everything is manufactured abroad. The only hardware still going strong is military hardware, and there the government is even the main (and often only) customer, not something where they would EARN money. They're spending.
So what remains as the generator of tax is service and content. Now, service is pretty hard to export. You can only export it by getting people from abroad to your country. While it is a generator of tax, it largely only creates domestic tax. Tourists from outside the US become fewer and fewer (and, honestly, I can't blame anyone who doesn't want to dare going to the US).
So what remains as the bringer of foreign money (besides the biggest bringer, the ability to "tax" internationally by having the foreign trade currency at your pressing fingertips, the USD) and balances the foreign trade at least to some degree is content, patents and copyright.
Health care is certainly a big tax bringer of the future, but this most certainly only creates domestic tax and does not generate a single cent of foreign money pouring into the country.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.