How Obamacare Will Hurt The Economy
Obamacare actually discourages work, according to Congressional Budget Office director Doug Elmendorf. Jed Graham writes at IBD:
Congressional Budget Office director Doug Elmendorf said Friday that ObamaCare includes work disincentives likely to shrink the amount of labor used in the economy. In a speech on ObamaCare's economic impact outside the health care sector, Elmendorf said that those effects will primarily be related to the labor market and "will probably be small."Factoring in additional demand for workers in health care and insurance, CBO estimates that "the legislation, on net, will reduce the amount of labor used in the economy by roughly half a percent," he said.
The reason: The expansion of Medicaid and new health insurance subsidies will reduce "the amount of labor that workers choose to supply."
It seems people are going to have to be very, very careful about not earning too much money, lest they become ineligible for their share of the government welfare pie. From Ted Frank on Point of Law:
According to the Kaiser Foundation's Health Reform Subsidy Calculator (via IBD), a 62-year-old in a high-cost area earning $46,000 a year without health insurance is entitled to a $7,836 government tax credit. Leaving aside how our strapped government can afford that, here's what's interesting: if the same person makes a mistake and earns an extra $22 in income, he loses the entire $7,836 credit. (The cutoff, according to Kaiser, is between $46,021 and $46,022.) That's a 35,618% marginal tax rate. Indeed, the problem is so severe that our 62-year-old subject will have more take-home pay if he earns $46,000 than if he earns $55,000.
Whoops, guess legislators should have read the bill and rubbed two thoughts together about it before they voted for it! Their bad. And now all of our bad.
By the way, if you want to make my boyfriend Gregg snarl, remind him that the passage of Obamacare means that he's going to have to start 1099-ing Delta Airlines, Hertz rent-a-car, and a slew of others he spends more than $600 with annually. By the way, you'd better believe I'm going to stop my Staples spending at $599 if it means I don't have to 1099 them.
Way to tank the economy, legislaturds!
The Goddess writes:
And they will be. Always distresses me to see those who collect SSD refuse good-paying jobs with terrific benefits because they just can't give up that $500-1000 disability check.
Patrick at October 29, 2010 12:20 AM
We need to start eliminating the checks.
Disability should come in the form of some crap housing, limited utility provision, and inexpensive healthy food. They can work as much as they want and live off the provided disability goods and services...or provide what they want for themselves out of pocket.
Robert at October 29, 2010 5:21 AM
Also big companies like Boeing, McDonalds etc... are thinking about eliminating healthcare for their employees thanks to... OBAMACARE!!! Big round of applause for our politicians ladies and gentlemen. Thank you.
David M. at October 29, 2010 6:02 AM
David M: Also big companies like Boeing, McDonalds etc... are thinking about eliminating healthcare for their employees thanks to... OBAMACARE!!! Big round of applause for our politicians ladies and gentlemen. Thank you.
I blame the voters for that. Obama only gave them what they were crying for. Now, all of a sudden, they decide they don't want it.
Well, then the uninsured have two options: stay well, or die.
Patrick at October 29, 2010 7:02 AM
Obamacare didn't make the two reforms that were needed:
1. Untie healthcare from the workplace, since people now change jobs a great deal throughout their lives, and sick people are often chained to a job they want to leave just to get health care.
2. Allow people to buy health insurance across state lines.
Amy Alkon at October 29, 2010 7:12 AM
"Also big companies like Boeing, McDonalds etc... are thinking about eliminating healthcare for their employees thanks to... OBAMACARE!!!"
How can anyone be surprised? If I were a share holder I'd be pissed if the didn't do it. If I were an employee I'd obviously feel different.
vlad at October 29, 2010 7:12 AM
Health care reform is always a great idea, in the abstract. It is when you start getting specific that people start objection. What the ding-a-ling's forgot is the Hippocratic Oath: first, do no harm. Any legislation has to be demonstratively better than what it is replacing.
I blame the voters for that. Obama only gave them what they were crying for. Now, all of a sudden, they decide they don't want it.
It wasn't all of a sudden. Did you not pay attention to the "town hall meetings" in the summer and fall of 2009 where many Congresscritters got called on the carpet by their constituents for supporting such a wretch train wreck of bill? a bill that had to be passed in the night, in a special session of the Senate on Christmas Eve.
As Nancy Pelosi famously said, we have to pass the bill to know what's in it.
Well, then the uninsured have two options: stay well, or die.
Umm, no. They walk/crawl/carried into an ER, get treated and on their way. No need to pay. But now, thanks to Obamacare, you better have insurance or a spare $3,000 to pay the IRS with.
But is it a tax, or penalty?
I R A Darth Aggie at October 29, 2010 7:34 AM
But we had to get the bill passed to find out what was in it!
Pirate Jo at October 29, 2010 8:08 AM
Nice try, Patrick. My insurance is going to be made illegal by this stupid law, and it will be cheaper for me to pay the $3,000 penalty than it will be to buy insurance (which I estimate will be in excess of $1,500 a month based on what I'm seeing and hearing now in the private insurance market).
Needless to say, I won't qualify for the subsidy, but I will qualify for all the higher taxes.
Thanks, 52%! You just HAD to get your fucking tendrils into health care so you could finally live all our lives for us because we're too stupid to do it on our own.
Your kind will be the first with their backs against the wall when the revolution comes.
brian at October 29, 2010 8:24 AM
Government meddling created this whole disaster during WWII. There is a certain naivete in expecting them to be able to fix it.
Meanwhile, in NY, I cannot even buy the health insurance I would like.
Some people can't handle freedom, so no one should have it. That's the real NY State motto.
MarkD at October 29, 2010 8:30 AM
Unfortunately I believe this was the plan all along, make it semi socialized and when that forces it to crash the way is paved to completely socialize it.
Joe at October 29, 2010 1:53 PM
So, I have to 1099 the utilities, cable, telephone, grocery store, health food store, vet, Walmart, Sam's, my mail order pharmacy, gas stations, and maybe a couple of other online companies? I don't even know how to keep track of all that, most of the time DH doesn't even make it home with his receipts.
nonegiven at October 29, 2010 2:16 PM
vlad, with regard to one of the named companies, I'm both. I suspect this is actually true of a lot of people (and perhaps they don't realize it); they hold shares of their employer in their 401k. So obviously I have mixed feelings about it. Our plan is good. As of January 1, it will be less good. My employer is self-insured -- they hire one of the Blue Crosses to administer it, but the company itself bears the financial risk. I understand the problem, and that the company has no choice but to play the game by the established rules. The rules need to change, and only voting individuals can do that.
Cousin Dave at October 29, 2010 4:49 PM
I was thinking: I'm paying a lot in federal taxes, state taxes, and so on. Maybe I should send a 1099 to them, too...
DaveJ at October 29, 2010 5:42 PM
I thought you only had to invoice a company if you spend $600 or more in an individual transaction, not cumulatively? Unless I misunderstood.
BunnyGirl at October 29, 2010 6:59 PM
The 1099 requirement only applies to businesses, and it's $600 aggregate per fiscal year.
The unstated goal (although stated many times before) is for the IRS to be able to accurately track every single transaction to ensure complete submission.
brian at October 29, 2010 7:05 PM
I have, on and off, over the years tried to get a side consulting business going.
It will now cheaper for me to say screw it -- buy the equipment as a personal expense and not have it as an asset and expense it off on my taxes. I will also charge less so I, and the business I'm consulting for, can slide it by.
The whole underground economy will boom.
Jim P. at October 29, 2010 8:48 PM
I think we are going to see a rise in $599 purchases. Anytime the gov sets an arbitrary limit people always twiddle with it. Bank transfers over $10,000 will give you troubles. Hmm why not just do two $5000 transfers.
Hmm wonder if somebody will add some sort of extension or app to their accounting software.
John Paulson at October 29, 2010 9:33 PM
>>"I blame the voters for that. Obama only gave them what they were crying for. Now, all of a sudden, they decide they don't want it."
Patrick, I'll disagree with you on that. I remember at the time reading several articles and polls in which upwards of 50% of the people were *against* this thing. I think in my local area it was something like 69%, but don't quote me on that.
The thing is, our politicians no longer do the bidding of the people. Rather, they believe they know better than us, and will make decisions regardless of what we actually want. It's more than a little scary, actually. When a great proportion of people say "NO!" and yet your representative says "You don't want it only cuz you don't know any better.".
cornerdemon at October 30, 2010 6:46 AM
Heard on the radio today, that under this crap called health care reform, that FSA (Flex Spending Accounts), will require you to have a prescription for anything bought where you will be reimbursed through the FSA.
Glad that it had to be passed so we could find out what is in it.
Steve at October 30, 2010 7:02 PM
What really sucks about FSA/MSA account is they don't save you a dime.
For example -- I have to guess what I will spend in a year on prescriptions, etc. If I don't use it all, it goes away.
If I say I want to put $750 and use $500 -- the rest is gone.
Where if they allowed me to shove $2500 in and I would have that next year along with the $750 left over from the prior year I might actually do it.
Jim P. at October 31, 2010 12:21 AM
The 1099 rule applies to business and anyone earning income not on a W-2. The $600 is a cumulative calendar year limit.
ParatrooperJJ at November 1, 2010 7:55 AM
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