Yet more evidence that Obamacare is a giant piece of turd.
The Congressional Budget Office (CBO) just crunched its numbers on the disastrous economic impact of the Affordable Care Act (ACA), better and more accurately known as Obamacare. Human nature being what it is — selfish and self-interested — Americans are expected to reduce the number of their work hours so that they’ll qualify for Obamacare subsidies. In other words, Obamacare is a disincentive to work.
The CBO estimates the result will be 2.5 million fewer workers by the year 2024. Fewer people working, in turn, means:
- Less tax revenue for the government
- More government spending on
- More government deficits and higher national debt
- Higher taxes on those who still work and pay income taxes
Here are excerpts from the CBO’s report, “Appendix C: Labor Market Effects of the Affordable Care Act: Updated Estimates“:
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.
…reduced incentives to work attributable to the Affordable Care Act (ACA)—with most of the impact arising from new subsidies for health insurance purchased through exchanges—will have a larger negative effect on participation toward the end of that period.
The reduction in CBO’s projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024. Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA.
The number of people who will receive exchange subsidies—and who thus will face an implicit tax from the phaseout of those subsidies that discourages them from working—will be smaller initially than it will be in later years. The number of enrollees (workers and their dependents) purchasing their own coverage through the exchanges is projected to rise from about 6 million in 2014 to about 25 million in 2017 and later years, and most of those enrollees will receive subsidies. Although the number of people who will be eligible for exchange subsidies is similar from year to year, workers who are eligible but do not enroll may either be unaware of their eligibility or be unaffected by it and thus are unlikely to change their supply of labor in response to the availability of those subsidies.
CBO’s estimate that the ACA will reduce aggregate labor compensation in the economy by about 1 percent over the 2017–2024 period—compared with what would have occurred in the absence of the act—is substantially larger than the estimate the agency issued in August 2010.