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The Real Jobs Killer

February 5th, 2014 - 5:07 pm

Megan McArdle tackled the CBO’s prediction that ♡bamaCare!!! will result in the loss of the equivalent of 2 million jobs in the next three years:

– Most of the projected disemployment will be voluntary — people leaving the workforce because they no longer need to work to maintain their health insurance. Or second earners who look at the extra income they get from their jobs, look at the amount it will cost the family in child care, other expenses, and lost Obamacare subsidies, and decide they might as well stay home. The CBO is not saying that millions of people will be thrown out of work because of Obamacare; it’s saying that millions of people will be leaving of their own accord.

– Determining whether this is good or bad is an exercise that must be left for the reader. Social conservatives might like the idea of Obamacare effectively subsidizing stay-at-home moms in low- to middle-income families. (As it does.) Or they might object to subsidizing early retirement with taxpayer dollars. (As it does.) Liberals might have the opposite reaction: Worry that you’re subsidizing women to leave the workforce when they may have a hard time getting back in; celebrate the subsidy that allows folks to retire and start enjoying their golden years while they’re still healthy.

– Economically, this is obviously going to be something of a drag, and it will put strains on other systems. People who retire early probably aren’t collecting Social Security yet, but they aren’t paying into it, either.

Megan is entirely too kind in that last point. Whatever you think of ♡bamaCare!!!’s unintended (?) consequences, the result is lower production and higher benefits. That’s not “something of a drag.” That’s hastening the day we run out of other people’s money.

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I yield to no one in my contempt for the ACA. However, hanging one's argument on a CBO projection is grasping at a thin reed indeed. The CBO is worthless as budgetary projection authority. See Kliesen & Thornton. The CBO may or may not be well meaning, filed with capable people and/or non-partisan. None of that matters. The are bound to follow a rigid set of statutory guidelines and procedures to model some extremely dynamic and complex eventualities - the kind that don't take kindly to rules. Difficult work in the best of circumstances. Their outyear projections are often not even directionally correct. Sorry.
1 year ago
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They're the best nonpartisan legislation predictors we've got. But as the old saying goes, "predictions are hard, especially about the future".
1 year ago
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