WASHINGTON, February 6, 2014 – In response to the CBO’s report that the Affordable Care Act will reduce the number of people employed, the Obama administration liberal mouthpieces said that this is a good thing. Low income workers, they said, would be free to pursue other interests, if they knew that they would still have health care.
Then there was the bizarre editorial in The New York Times, where the editors, who were seemingly trying to convince themselves, agreed that having fewer people contributing to the economy, and more people freeloading, is a good thing. This will free people to make choices without fear of losing their health insurance, they noted.
The truth is that when a person decides to stop contributing to the economy but still receives healthcare services, someone else has to pay for it. For each freeloader created, the contributors – those working and paying taxes – have to pay more. This is simply counter-productive.
The CBO is right. For those who contribute marginally to the economy, and therefore receive marginal income, a sound economic decision is to work less or not at all, and let the taxpayers pay the bills for you, especially if the government encourages it. From the standpoint of the contributors though, this becomes very difficult.
The contributors already pay up to almost 40% of their income to the federal income tax, up to 10% in state income tax, 6.2% (really 12.4%) in Social Security tax for the first part of their income, a state sales tax of 7% on almost everything purchased. 1.5% medicare tax, special taxes on products like gasoline and alcohol and numerous new taxes from the Affordable Care Act. Every time a contributor is encouraged to stop contributing, the remaining contributors end up paying more in taxes. They are Taxed Enough Already.
That’s why the TEA party started.
We got into this bind in the sixties and the seventies, when the federal government made it easy to be a non-contributor. The results of this policy were large numbers of people demanding goods and services and a smaller number producing them. This lead to a stagnant economy with rising prices. The stagflation problem wasn’t solved until the 1980’s when the federal government changed their policy decisions and started to discourage freeloaders and encourage contributors. Then the inflation rate came tumbling down and so did the unemployment rate. The economy began to show rapid growth which creed a long term expansion
Currently, at this stage of an anemic recovery, the last thing we want to do is to discourage contributors. After all, the reason that we don’t have growth is that we don’t have enough people contributing. It should be relatively easy to understand that the more people we have contributing, the more output is produced. More output leads to more growth, more opportunity and fewer freeloaders being supported. This will solve numerous other economic problems.
We know that the full negative impact of the Affordable Care Act has yet to be felt. Once the employer mandate fully kicks in, the incentive for employers to offer workers less than 30 hours of work per week becomes great, which further leads to workers contributing less. The CBO also says that Obama’s policies will result in such a low labor force participation rate that economic growth will just barely exceed population growth for the next decade.
Since we are trying desperately to come out of the economic funk we have been in since 2007, we should do everything possible to encourage people to contribute – to work. This bizarre talk about encouraging people to be freeloaders will worsen the problems that we have today.
So please Mr. President: No more freeloaders! We are caring too many already.Click here for reuse options!
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