With all of the talk of health reform I find it fascinating to consider the following thought experiment. Look at the allocation of the average person’s financial resources. Over the past many years, as the rate of production per person has increased in first-world economies, more of the average person’s financial allocation has moved from necessity to discretionary. There was a time when almost the entirety of a person’s income was dedicated to survival. In the game of life food and clothing trump most else. But consider the current trend. Human labor represents a smaller and smaller portion of the productive economy. Machines replace the menial jobs in all but the most economically depressed societies. The natural resources of the world though limited are vast. The energy potential of the universe is so great that it makes our diminutive efforts to capture it laughable. In this thought experiment we enter an era of over production. In it we find the necessities as a portion of GDP disappear entirely. After all, an individual can only eat so much and wear so many cloths. What then is left? The rest of production becomes discretionary. Markets become more volatile, driven by fancy instead of need.

There is, however, one thing that remains unchanged – the necessity of health. Health spending is not a discretionary expense. If you have the option of curing your illness with $1000 or buying a new TV, you will cure your illness. And in our land of infinite production that rule has consequence. It means that the limit of our health spending dominates the equation. This brings us to a remarkable conclusion – at some point health will dominate all GDP. The dominance will be dependent on the amount of production. The higher world-wide production – the higher a percentage will be allocated to health. This means that no matter what happens in health reform health spending will grow. But it isn’t a sign of failure – it’s a sign of success. It means that we are blessed with abundance.