![]() Later CBO forecasts in 20 show a substantial decline in projected GDP growth in 2013, but the CBO explains this as the result of expected fiscal tightening (specifically, the removal of the 20 tax cuts and the elimination of extended unemployment benefits), which are larger events from the macroeconomic point of view. The CBO reduced the GDP growth rate forecast in 2012 (before the ACA was scheduled to have an effect), but the impact was rather small. Figure 1 compares the CBO forecast for real GDP before (January 2010) and after (August 2010) the passage of the Act. Q: Have economic forecasters lowered their forecasts because of the ACA?Ī: From a macroeconomic perspective, the ACA was not large enough to affect GDP growth forecasts. This means the adoption of the ACA will not come as a sudden shock of the type that often generates recessions. In addition, economic actors can anticipate many of the changes required by the ACA, and these changes take place gradually. The possible impacts-positive or negative-of the ACA are small compared to recession-creating events such as the Lehman collapse, the bursting of the stock market bubble in 2001, or the rise in oil prices in 1973. ![]() Q: Could the ACA create a recession or a significant slowdown in growth?Ī: This seems very unlikely. Overall productivity may increase if labor costs rise and businesses substitute capital for labor. The ACA may also increase GDP growth in the short run by increasing the demand for health care goods and services. It might also increase GDP growth by reducing labor costs, if it succeeds in improving innovation and productivity growth in the health care sector. Q: What are the channels through which the ACA might affect GDP growth?Ī: The ACA will affect GDP growth by reducing the supply of labor, as documented by the Congressional Budget Office (CBO), which would tend to reduce GDP growth. View the Behind the Numbers collection, a monthly series from Deloitte’s economists.
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