The American Nation A History of the United States, Combined Volume (14th Edition)

Health Care Reform 873

Then word leaked out that hundreds of millions
of dollars had been paid in bonuses to executives of
Goldman Sachs, AIG, and many of the big banks that
had been saved by federal bailouts. Obama railed
against their ill-timed greed and slapped the compa-
nies with nuisance taxes, but he could do little else.
He needed the big financial institutions to help jolt
the economy back to life.
By the fall of 2009, the strategy appeared to be
working. Employment increased and the stock mar-
ket rose. Some banks repaid their government loans.
Talk of economic collapse abated, partly because
predictions varied widely. Some economists insisted

that once the stimulus money had been exhausted,

employment, wages, and prices would again fall and

the nation would slip into a recession—or worse.

Others pointed to the projected $1.8 trillion deficit

for 2009 and predicted rampant inflation. Insofar as

no one had forecast the financial meltdown of

2008–2009, most political leaders discountedall

economic predictions and simply hoped for the best.

The Connection Between Obama & Lincoln

atwww.myhistorylab.com

Health Care Reform

Obama now moved ahead on his promise to reform

health care. Veteran politicians and pundits smiled at

his bold words. In 1993 President Clinton, a formi-

dable politician, had mounted a major campaign to

enact a health care reform spearheaded by his wife,

Hillary. They failed.

But by 2009 nearly everyone agreed that medical

costs had spun out of control. In 1990, per capital

medical expenditures were $3,000; by 2009, they

exceeded $8,000. That year, though nearly 18 per-

cent of the nation’s gross domestic product went for

medical care, some 46 million Americans lacked any

coverage whatsoever. When struck by serious illness,

they were denied treatment or were hit with stagger-

ing bills. More than half of the nation’s personal

bankruptcies were precipitated by illness.

Fingers pointed in every direction. Doctors

blamed lawyers, whose success at winning huge

malpractice settlements drove up the cost of mal-

practice insurance premiums. Lawyers blamed the

StudyandReview

1992

–1500

–500

500

0

–1000

–2000

199419961998 2000 2002 2004 200620082010

(in hundreds of billions of dollars)

Annual Federal Deficit (and Surplus), 1992–2010After years of
deficits, the federal government operated at a $250 billion surplus in

2000. But the war on terror after 9/11 resulted in massive deficits,
      which were exacerbated by the financial meltdown after 2008.

1960

200%

1000%

1800%

1400%

600%

400%

1200%

1600%

800%

0%

1964 1984

Price Increases - CPI vs. Medical Care (Cumulative % Increase)

1968197219761980 1988 1992 1996 200020042010

Medical Care

Total CPI

Cumulative % Increase in Medical

Expenditures/CPI (Consumer Price Index)

The Increasing Cost of Health Care, 1960-2008 (% increase)By the 1990s, health care cost

increases greatly exceeded the increase in the Consumer Price Index.