Wednesday, February 26, 2014

Obamacare Delay: Good Politics, Bad Economics

Mises Daily: Monday, February 24, 2014 by D.W. MacKenzie
The Congressional Budget Office has reported that ACA subsidies will lower the labor force participation rate in coming years. The Obama administration has also decided to delay the small business mandate part of the ACA until 2016.Officials of the Obama administration insisted that lower participation rates in the labor force are beneficial. Lower income Americans can now decide to work less, to supply less labor, to work part time or retire earlier. By working less Americans can take care of family members or enjoy more leisure time.
The Obama administration has in the same week admitted that the burdens that the ACA places on small businesses are onerous. The costs of the ACA will therefore cause smaller employers to demand fewer workers.  Economically speaking, there is not a real difference between workers supplying fewer hours of labor and employers demanding fewer hours of labor. In terms of the production of real wealth fewer hours of labor used in industry translates into reduced overall production. Politically, however, there is a very real difference between workers wishing to supply more hours, and employers demanding more hours…..To Read More…

No comments: