We've Been Had

In a previous post on the abhorrent new bankruptcy bill the Senate couldn't pass fast enough, I cited Paul Krugman citing a Harvard study. According to this study, medical bills were behind half of all bankruptcies in the United States. It's a statistic that, for the most part, makes sense. I mean, why would people likely declare bankruptcy? Loss of a job would be my #1 guess, followed by a medical emergency.

But it turns out, this statistic is totally bogus. Not that this excuses the passage of this idiotic bill, that only serves credit card companies while crippling many middle and lower class citizens, not to mention the elderly and veterans in disproportionate numbers.

But still, it's a faulty stat. According to the National Review Online (NRO from here on), the study uses the term "medical cause" extremely loosely. Specifically, it considers gambling or alcohol addiction to be a "medical problem."

For example, the study classifies "uncontrolled gambling," "drug addiction," "alcohol addiction," and the birth or adoption of a child as "a medical cause," regardless of whether medical bills are involved. Yes, there may be situations in which a researcher might legitimately want to classify those conditions as "medical," but a study that is being used to prove that Americans are going bankrupt as a result of crushing medical bills is not one of them.

I'll concede the point. Even though alcoholism is certainly a disease that should be treated medically, it's not exactly fair to classify bankruptcy caused by excessive drinking as "due to medical expenses." And adopting a kid? Babies are just a financial hardship, whether you adopt them or birth them the old fashioned way.

So that study is blantantly misleading. I thought you should know. I usually like Paul Krugman, and I'll give him the benefit of the doubt and assume he merely glanced at this study too quickly before including it in his column. And it is only one point in a larger column that's highly worthwhile.