This is one of the most interesting graphs I’ve ever seen....

This is one of the most interesting graphs I’ve ever seen.  Remember the consumptionholic lifestyle Americans were living?  Sure there were overextensions: too much car purchasing, too much pool building, too much Best Buy credit carding, etc.

But look at that graph; it seems a significant portion of that “binge spending” can be attributed to healthcare.  Left Business Observer:

Some numbers to make these points: at the end of 1978, consumption was 61.5% of GDP; in the second quarter of 2008, it had risen to 70.3%, or 8.8 points. Well over half that increase, 5.0 points, came from spending on medical care. The share of GDP devoted to spending on goods actually fell by 4.7 points over that 30-year period.

The pattern is preserved if you start the clock in 1997, just as the stock and housing manias were taking off. Medical spending accounted for almost a third of that rise between 1997 and 2008. Energy accounted for another third. Spending on goods accounted for just 3% of the rise, or 0.1 point. In other words, the familiar story that Americans went hogwild buying all kinds of stuff is wrong.

Wow.