Vietnam & US Spend influence
It is true that these inflationery movements were
partly attributable to a signifcant pick up in
government spending associated with the
Vietnam War.
Yet it is also true that the
increase in core inflation was more broad based.
In fact, one of the most signifcant areas of
inflation was medical care following the
introduction of Medicare and Medicaid in
1965.
Healthcare services prices rose nearly
three times as fast as overall consumer prices
over the next five decades. Fast forward to
today and the Affordable Care Act has been
argued to have contributed to the signifcant
slowdown in health care inflation in recent
years.
Given the various political noises for it
be repealed in part or full, healthcare costs
may push higher in the future.
EU Forecast
euf:b18:43/nws-01