October 23, 2011 05:57 PM UTC

What if the solutions we are proposing - won't help?

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• by: DavidThi808

from The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History,Got Sick, and Will (Eventually) Feel Better

For healthcare, insurance coverage may not improve anything:

The famous RAND Corporation study of the 1970s gave thousands of Americans 100 percent free medical care, while the control group had to face insurance co-payments for care, as under normal circumstances. The group with free care consumed 25-30 percent more medical services. Yet, except for the very poorest group, the free health care didn’t make people any healthier. Most plausibly, that outcome is because many factors besides health care influence our health. When it comes to surgical patients, the uninsured seem to have better health outcomes than do Medicaid patients, even after controlling for thirty different comorbid conditions and many other relevant variables. You can give this “non-result” a lot of different twists or reinterpretations, but still it is further evidence questioning whether extra medical spending is bringing huge value.

And for education, more money seems to have zero impact:

How has spending on education changed over the last forty years? Well, it has gone up a lot. The test scores haven’t risen since the early 1970s, but, adjusted for inflation, we’re spending more than twice as much per pupil. In 1970-1971, the per-pupil expenditures were $5,593, and in 2006-2007, those same expenditures are measured at $12,463.

…

U.S. spending on education, as a percentage of our economy, is well above the OECD average and, by one measure, is second only to Iceland. Yet at least at the K-12 level, we are not performing at a superior level compared to other countries, including our neighbor Canada.