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Am I missing something or is the health of the nation taking a back seat to the health of the economy – when it comes to the United States?
Lately it seems that everywhere you turn there is something to be said about healthcare reform. There was the health care summit (where Senator John McCain once again faced President Barack Obama) and there have been a seemingly endless round of interviews, debates, press conferences and speeches – all devoted to the health care bill. And then there’s the news coverage.
One piece of news coverage that recently caught my eye involved an interview with billionaire investor Warren Buffet. In an interview with business channel CNBC Buffet said that America’s health care system did need major reform because it was a major drain on U.S businesses. He said that health care costs put the nation at a competitive disadvantage compared to other countries. However, he also said that “unfortunately, we came up with a bill that does not deal with the cost system much”.
So, it would appear that even though a lot of time is being devoted to the subject of health care the real point is actually being missed. The real issue – which is what healthcare is costing the country – is not being addressed. Instead the politicians from both sides are spending their time going backwards and forwards when really what they should be doing is just going forward.
And what of the United States economy? Well, there is still the issue of jobs as well as lack of consumer confidence. Without an improvement in either recovery could still be a long way off.
The monthly jobs report for March, which is a key economic bell-weather, indicated that there were fewer job losses than expected in February. However, the report also showed that significant hiring – which is required to get the economy moving – is still yet to occur.
This monthly indicator of the state of the job market is widely and currently seen as the most important reading on the economy because a lasting recovery will not be possible if more jobs aren’t created.
Another key indicator is consumer confidence. This, in turn, affects consumer spending which has a bearing on companies and their performance – which also has a bearing on jobs.
Admittedly the U.S government is doing something. Recently the United States Congress passed a jobs bill that would give companies who hire the unemployed a tax break. The bill was expected to be worth USD $35 billion. However, there were doubts whether the legislation – and the amount allocated – would actually work. In other words, is it enough?
Similarly there are concerns about the housing market in the United States. After all the family home is most household’s primary asset. In addition the amount of money tied up in the family home is the often the family’s – or a retired couple’s – nest egg.
However, unfortunately it has emerged in figures out in March that there was an unexpected drop in pending home sales in January. According to the National Association of Realtors its index of home sales agreements fell 7.6 percent in January compared to those of December. This was said to be the lowest level since April last year – and that’s not a good sign.
In fact it could be a sign that the effectiveness of the U.S government’s incentives are starting to fade. This is important because the index itself is an indication of future sales because there is usually a 2 month delay between initial purchase and completed deal. Is this particular report a sign of things to come?
So with all this in mind shouldn’t the Obama administration be paying more attention to the economy? Just when will we start hearing more about the economy and less about health care? The answer is presumably when the health care bill is passed.
Unfortunately there does not appear to be an end immediately in sight for the health care debate. While President Obama wants the United States Congress to back the latest version of the bill (which amounts to a US $950 billion package designed to provide insurance to uninsured Americans and will lower premiums) the Democrats no longer have the 60-seat majority to carry the bill through and have it signed in to law. As a result we could be in for a long haul.
In the meantime the health of the economy will take a backseat to the health of the nation. And if the economic stimulus package put in place by the government starts to run out of steam then the economy’s already slow growth could slow further. That’s not good – it could affect us all – inside and outside the United States Here’s to your health – financial and otherwise!
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