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Thursday, February 6, 2014

Paul Krugman, "Health, Work, Lies": Nothing Wrong With a Disincentive to Work

On Tuesday, the Congressional Budget Office released a report detailing the anticipated effects of the Affordable Care Act:

"The ACA’s largest impact on labor markets will probably occur after 2016, once its major provisions have taken full effect and overall economic output nears its maximum sustainable level. CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive."

Or stated otherwise by Douglas Elmendorf, Head of the CBO (see: http://www.nationalreview.com/corner/370398/cbo-head-obamacare-creates-disincentive-people-work-andrew-johnson):

"By providing a subsidy, these people are better off, but they do have less of an incentive to work."

In his latest New York Times op-ed entitled "Health, Work, Lies" (http://www.nytimes.com/2014/02/07/opinion/krugman-health-work-lies.html?ref=opinion), Paul Krugman tries to help the Obama administration defuse this bombshell:

"It has always been clear that health reform will induce some Americans to work less. Some people will, for example, retire earlier because they no longer need to keep working to keep their health insurance. Others will reduce their hours to spend more time with their children because insurance is no longer contingent on holding a full-time job. More subtly, the incentive to work will be somewhat reduced by health insurance subsidies that fall as your income rises."

Americans "will reduce their hours to spend more time with their children"? Yeah, right.

Krugman's conclusion:

"And now we have a fairly innocuous technical estimate misrepresented as a tale of massive economic damage."

Creating a disincentive to work does not constitute massive economic damage? Remarkable! But then what should you expect from a Nobel Prize winning economist who told us (http://www.nytimes.com/2011/10/07/opinion/krugman-confronting-the-malefactors.html):

"Occupy Wall Street is starting to look like an important event that might even eventually be seen as a turning point.

. . . .

It’s clear what kinds of things the Occupy Wall Street demonstrators want, and it’s really the job of policy intellectuals and politicians to fill in the details."

Thanks, Paul, for telling us how successful Occupy Wall Street Obamacare will be, but once again, let's agree not to agree.

1 comment:

  1. Sorry, Jeff, you are babbling and I have no patience for it.
    Several things.
    Slavery is bad. Slavery is bad economically. Slavery isn't particularly loved by slaves (yes, it matters .. even to slaveowners when their heads or family heirlooms are chop off)
    I am not lying, Jeff. And why don't you open a book of history or two. Yes, Jeff, history matters in spite of the fact that the same bozos who are now babbling (and shouting) about disincentives to work have been babbling (and shouting) about uselessness of history for decades.
    Now. I have a piece of news for you. Guess what .. there aren't any jobs in America. I just replaced my computer - the computer was made in China of course, TECHNICAL help came from ... India.
    Now, as an American you don't know history (and can babble freely), but I am formed somewhere else and guess what I know my history. The technology was pushed and pushed and pushed with a promise of civilized life for humans - short workweeks, long vacations, time for personal development, for family, friends, community, country. Instead, we're descending into slavery. Read the first paragraph ...

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