The website that specializes in the economic wacky, lately popular on the right as a rhetorical club against Obama which Tyler Durden exploits to gain eyeballs, says today
here that ObamaCare spending is the cause of the total collapse in 1Q2014 GDP. You know, like ObamaCare is responsible for all you full-timers getting part-timed.
ObamaCare, the heart of all darkness.
That's funny, because in April Zero Hedge
maintained ObamaCare spending was the sole cause of the
rise in 1Q2014 GDP.
Well which is it?
In other words, in April ObamaCare was the only thing responsible for positive GDP ihao, but in June it is the only thing responsible for negative GDP. This is because we're supposed to believe that healthcare services spending evaporated in the final estimate of GDP (a swing from +$39.9 billion in the 2nd estimate to -$6.4 billion in the 3rd), evidently accounting for $46 billion of lost spending in the Zero Hedge world of weird math between Q4 and Q1. The swing negative caused the personal consumption expenditures collapse, he says, which fell almost $60 billion inflation-adjusted Q4 to Q1.
Of course, that's comparing apples to oranges. Healthcare services spending in Q4 was positive $24.4 billion. That makes the swing barely $31 billion from positive into negative territory, not $46 billion.
From that you wouldn't know that PCE was still positive in the 3rd estimate: $27.7 billion. Nor that goods consumption collapsed $24.5 billion from Q4. Nor that spending on utilities was up a whopping $23 billion because of the cold weather. Nor that the output of nonprofits swang nearly $28 billion into negative territory from positive, while receipts for goods and services of nonprofits suffered a similar swing, $29 billion from positive to negative. Schwing!
Does he read the report?
The inflation-adjusted decline in GDP totaled just over $118 billion, $81 billion of which was from a decline in private domestic investment from positive $16 billion in Q4, mostly inventories, and $58 billion of which was from a decline in net exports of goods and services, from a positive $37 billion in Q4. That's where the real decline was, a total swing of over $190 billion from just those two categories.
Maybe the silliest thing Durden predicts is that all that "lost" ObamaCare spending will magically reappear in Q2.
Which leads us to ask: What if ObamaCare actually did reduce healthcare services spending in Q1? Isn't it conceivable that a bunch of people, now qualifying for subsidies under the program, had significantly reduced costs? Who knows, the $6.4 billion drop might actually be the first and only drop we're ever going to see in healthcare services spending under ObamaCare.
I'll bet on that before I'll bet on a 5% GDP print from Obama.
