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Obamacare has been a drag on the US economy so far based mostly on uncertainty and on businesses preparing to comply with its various rules, mandates, penaties, taxes, and fees. But a new report from the CBO shows that the law will trap people in unemployment and cause higher deficits, piling onto the national debt while lower tax receipts make it harder for the government to repay.
There is no way to fix the flawed design of Obamacare. Since its subsidies for insurance companies are inversely proportional to the income of their customers, dropping off as it rises, Obamacare will inevitably convince people to turn down work to keep their insurance. In case it's not clear, that's not good.
To be specific, the nonpartisan Congressional Budget Office says that Obamcare will cause up to 2.5 million Americans to be unemployed by 2024.
Those aren't jobs lost, exactly, but that's not to say it's a good thing. The jobs may still be there, at least for a while, but in a sad twist of bad policy, 2.5 million Americans will see themselves unable to take those jobs, or be convinced that they should not. Over two million people will see their dreams put out of reach, their will to succeed sapped, their working lives cut short by a warm pit of pleasant-looking quicksand.
Once again, we see government policy encouraging income inequality, while those who claim that inequality is the defining challenge of our time applaud. The income inequality will persist for generations, unless Obamacare is fully repealed.
It's not "job lock," where a person is locked into a job to keep insurance. It's more like being locked out of the labor market altogether: a job lockout.
That problem is especially acute since other government programs like SNAP, housing assistance, and the Earned Income Tax Credit also cut off as income rises. Obamacare makes the Work vs Welfare problem even worse than before.
Avik Roy noticed something else, that the CBO estimates economic growth will be slower:
Because of this slower economic growth, CBO projects that from 2014 to 2023, the federal government will receive $1.4 trillion less in tax revenue than it had projected last year. As a result, “CBO now estimates that the cumulative deficit for the 2014-2023 period…would be about $1.0 trillion greater than it projected in May .”
So that's another $1 trillion added to the debt our generation will be leaving for the next. There will be another trillion added to the debt, with millions fewer unable to work to pay the taxes needed to pay it off, while those millions more are trapped in government dependence.
It's all so unnecessary. America's employer-based health insurance took off because of wage and price controls in the 1940s: companies could offer health insurance, but could not offer higher wages. Since the benefits are tax-free, companies have been able to use the health insurance benefit as a way to compete for employees.
Via Twitchy, Martha McCollum asks a simple question:
Lemme get this right: companies used to incentivize hard work with benefits, now the govt discourages it with benefits?— martha maccallum (@marthamaccallum) February 5, 2014
It's a policy run amok. Even the US Chamber of Commerce, which has been warming to Obamacare, noticed the problem. Obamacare will sap from people the will to succeed, providing not a safety net, but an inescapable hammock.