Pt 1 - Cheat Sheet Q&A: Why Consumer Reports is all wet when it comes to the ACA leading to fewer personal bankruptcies:
Today's entry: Dear Brian - I listen to your show most mornings and find, in general, that you have strong opinions (which is OK) that do NOT reflect mine (which is also OK) and most often give only one side (which is not - this denies your listeners a full picture of what is going on).
Case in point - pls check out this Consumer Reports article on one of the (GOOD) side effects of the ACA and consequential results of getting rid of it:
Is what they report incorrect or are they drawing an incorrect correlation?
Bottom Line: Consumer Reports has two functions. Product Reviews and policy advocacy through "Consumer's Union". Consumer's Union historically has been highly politically engaged and I've disagreed with them on everything from the need for ID protection (which they recommend against) to the Affordable Care Act. If you have a differing opinion you're certainty welcome to it. But I live by a code that there are two sides to a story but one side to facts. My opinions are based after considering the facts which I've shared from the onset of the ACA proposal. As for the validity of the CR piece...
The Great Recession officially began in November of 2007 and officially ended in June of 2009. That being said unemployment didn't peak until late 2009 nationally. The top cause of personal bankruptcy has always been the loss of income/employment. It just so happens that the ACA was signed into law in January of 2010. With implementation beginning the following year. The CR piece, which attempts to make the case that the ACA has been the leading causation of declining bankruptcies, even demonstrates that personal bankruptcies had already begun a steady decline all throughout 2010 - before any implementation even began (yet attempt to make the case anyway).
Here's an unemployment chart history: http://www.tradingeconomics.com/united-states/unemployment-rate
If you click on the 10 year tab and compare it to the trend line you'll see that it mirrors the decline in personal bankruptcies (including accounting for the 2010 decline that the CR reporting can't account for). So yes, it's an incorrect correlation at best on their part. What's more is that the more solid economic theory is that the ACA has actually artificially contributed to personal bankruptcy cases being higher than they otherwise would.
In part two we'll examine the facts as they exist with the most recent data from the Kaiser Family Foundation.
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