Saturday, October 23, 2010

Obama care reduces the incentive to work

The CBO estimates that passing Obama care increases the unemployment rate by about 0.5%:
... the legislation, on net, will reduce the amount of labor used in the economy by roughly half a percent, primarily by reducing the amount of labor that workers choose to supply.

Its effect will be biggest among older workers, who receive the biggest subsidies. However, the really bad news is the it puts our fiscal train wreck ahead of schedule:
Total spending on health care now accounts for about 15 percent of GDP, and CBO projects that it will represent more than 25 percent by 2035.

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