Tuesday, February 24, 2009

President Cites Questionable Bankruptcy Statistic

I hate to quibble Mr. President, and I agree with you that we need national healthcare reform, although I imagine we will differ on how to achieve it. Nonetheless, please do not make your case with highly questionable statistics.

In his Not-a-State-of-the Union address to a joint session of Congress tonight, when he discussed the need for healthcare reform, President Obama stated that healthcare costs cause a bankruptcy filing every 30 seconds. Is that a credible statement? That would be a total of 1,051,200 bankruptcy filings per year due to healthcare costs. According to statistics at http://www.uscourts.gov/, the official website of the federal court system, the total number of all bankruptcy filings for the 12-month period ending June 30, 2008 was only 967,831. True, it is highly likely that the pace of bankruptcy filings has accelerated since then. However, it is also well nigh certain that only a fraction of all bankruptcy filings are due to healthcare costs. Even in the highly unlikely event that 2/3 of all bankruptcy filings were due to healthcare costs, as opposed to unemployment, substance abuse, gambling addictions, business failures, interest rate increases, credit card debt, and all other causes, the President's factoid would be incorrect.

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