Mankiw Tackles the "Sorta True"

Greg Mankiw has an article in the NYTimes Business section today on health care. The Harvard Prof says the problem with statistics is not so much the patently false ones, but the ones that are true but misleading. He then debunks without contradicting:

STATEMENT 1 The United States has lower life expectancy and higher infant mortality than Canada, which has national health insurance.

STATEMENT 2 Some 47 million Americans do not have health insurance.

-- and, my favorite --

STATEMENT 3 Health costs are eating up an ever increasing share of American incomes.

But increasing expenditures could just as well be a symptom of success. The reason that we spend more than our grandparents did is not waste, fraud and abuse, but advances in medical technology and growth in incomes. Science has consistently found new ways to extend and improve our lives. Wonderful as they are, they do not come cheap.

Fortunately, our incomes are growing, and it makes sense to spend this growing prosperity on better health. The rationality of this phenomenon is stressed in a recent article by the economists Charles I. Jones of the University of California, Berkeley, and Robert E. Hall of Stanford. They ask, “As we grow older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”

Mr. Hall and Mr. Jones forecast that the share of income devoted to health care will top 30 percent by 2050. But in their model, this is not a problem: It is the modern form of progress.

Joint hat-tip: Insty and Everyday Economist

Health Care Posted by jk at November 5, 2007 11:43 AM