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Busch: Improving Health Care As An Economic Cure
There is a re-occurring theme that is permeating solutions to the global malaise. As the old doctor's saying of "heal thyself" goes, leaders across the globe are pursuing policy that has healthcare as a major tenet for their plans.
This started in the United States where President Barack Obama has put forth healthcare, energy, and education as the three major points of his 2009 budget.
The healthcare component is targeted at overhauling the current system and looks to extend coverage to as many as 45 million people. The price tag could be as high as $1 trillion over ten years, but the Obama administration hasn't put a price tag on it. The trick is how to pay for the overhaul. Senate Majority Leader Harry Reid suggested using revenue from President Obama's cap and trade energy program and President Obama proposed limiting certain tax deductions for families over $250k. The important point to keep in mind is that the US House passed a fast track procedure to speed the legislation through Congress.
China Monday unveiled a blueprint for health-care over the next decade and begins a much-anticipated reform to fix the ailing medical system. The major goal of the reform is to build a basic health-care system that can provide "safe, effective, convenient and affordable" health services to urban and rural residents, according to the blueprint, endorsed by the Central Committee of the Communist Party of China and the State Council, or China's Cabinet according to Xinhuanet. As China has grown and the middle class has developed, the country has shifted some of its focus from mainly creating jobs to start the process to improve the lives of its people. The development of a social safety net is a good sign and healthcare is a good place to start.
Another Far East country looking to improve their healthcare system as a method for stimulating the economy is Japan. Prime Minister Taro Aso has directed Finance Minister Kaoru Yosano to compile a new fiscal spending package equivalent to more than 2% of gross domestic product, to be financed by the largest supplementary budget ever, totaling more than Y10 trillion, the Nikkei reported. For the budget, Mr. Yosano said there are five major priorities for the budget: creating a safety net for non-permanent workers; strengthening support for corporate funding; expanding solar power use; addressing concerns about nursing care and regional health services; and promoting regional economic development. Note the similarities on energy and healthcare with the United States.
Without question, these three nations are going to be spending significant sums on improving their systems over the next decade. As investors look for safe havens, healthcare remains an important place to look for comfort. If you are following the strategy of buying what the government is buying, then this is the place to be with China, Japan, and the United States all allocating resources towards improving their healthcare systems.
The question remains over if this is the best allocation of resources to solve a financial crisis or to stabilize the economy is certainly left open for debate. The point is to take note of what these governments are doing not whether its the correct strategy.
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