You can’t concoct a recession just by removing government, so instead Bessent objects that job growth is concentrated in “government and government-adjacent sectors” (emphasis mine). That little bit of number-fudging allows Bessent to discard the entire health care sector, which is a problem because health care happens to be the single largest industry in the United States. As I’ve argued elsewhere“health care kind of is the economy.” It employs 20 million people, more than any other industry sector, and it constitutes nearly 18 percent of GDP.
Does the United States spend too much of its GDP on health care? Probably. Our peer nations typically spend half as much per person. But that’s mainly because too much health spending in the U.S. (about 30 percent) is private. Government is much better than the private sector at controlling medical costs, and if the government’s share of health expenditures grew from its current 45 percent to more like 80 percent, health spending’s slice of GDP would shrink, making room in Bessent’s GDP pie chart for more economic growth that isn’t government-adjacent. Conservatives like Bessent pretend not to believe that government-funded health care is more cost-effective than privately funded health care, but this is well known among health economistsand it’s why Republicans fought tooth and nail to prevent Obamacare from creating a public option. They knew private insurers couldn’t compete with a government insurer on price.
To model a private economy that’s in recession, Bessent limits it mainly to manufacturing, metals, mining, and information technology. Employment in these sectors either shrank or failed to grow over the past year, Bessent said. But even that jerry-rigged calculation is misleading. Manufacturing employment, the component in this mix that’s of greatest public concern, dipped a little last year, but more saliently it grew under Biden from about 12 million to about 13 million. (Manufacturing employment fell by 188,000 under Trump.) Overall, Axios points outthe private sector (as defined by the Bureau of Labor Statistics, not Bessent) created a monthly average last year of 130,000 jobs, which doesn’t sound like a recession to me.
