Testimony from Doug Elemendorf, Director of the Congressional Budget Office, to members of Congress yesterday confirms what many fear about the Affordable Care Act (“ACA”). According to Mr. Elemendorf, the ACA is structured to create a “disincentive for people to work.”
He explained that the government subsidies in the ACA designed to help people purchase health insurance are structured in such a way that at some point it makes zero sense for individuals at certain income levels to try to enhance their lot in life by working harder to make more income since doing so would cause them to lose their subsidies.
Democrats claim this is somehow a good thing. They say that the law is structured to end “job lock” where people stay in jobs they hate simply to keep health insurance.
Nancy Pelosi said as much back in 2010 when speaking to the Asian American & Pacific Islanders Summit. Praising the new law, she said, “We see it as an entrepreneurial bill, a bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care.”
She added, “Think of an economy where people could be an artist or photographer or a writer without worrying about keeping their day job in order to have health insurance.”
Yes, spoken like a woman worth $33 million dollars who never has to work another day in her life. Each day that passes provides more evidence as to why this law doesn’t work in the real world. With the then Speaker of the House gushing with romantic notions of artists running around fulfilling their passions on the taxpayer’s dime, is it any wonder that we now have a law that is estimated to cost 2 million jobs since it’s designed, in part, to make working less desirable?
In fact, Ms. Pelosi’s example of the artist should be evidence enough of why the rationale for parts of this law are fundamentally flawed. Let’s put the term “starving artist” in historical context and then apply it to what Ms. Pelosi was trying to say.
First, let me note that I love art. In fact, I’ve served as a member of several boards committed to the arts. I certainly see value in art and music.
Nevertheless, people who try to make their living through art have generally struggled across the ages. Even the greatest artists and composers you can name throughout history generally enjoyed food and shelter only because of the generosity of wealthy patrons who paid their way. This was before health insurance was even an issue. It didn’t exist. Still, they needed to eat.
The same holds true today. Even with a government subsidy for health insurance, the artist or musician has to eat and pay rent. If the art isn’t working out for them yet, where do they get the money for these necessities of life? In other words, is the idyllic picture Nancy Pelosi painted to sell this law just a few short years ago even remotely realistic? If she was wrong about how that might really work out, is it so shocking that she and her fellow Democrats didn’t appear to carefully think through other implications of the ACA?
A couple of years ago, my family visited Paris. While there, we had a tour guide named Eric drive us around the city for a quick tour. Everywhere we went, he’d say, “This neighborhood is very bobo and that neighborhood is very bobo.”
Finally, it hit him I suppose that we had absolutely no idea what “bobo” meant, so he explained.
“It’s an area of the city where people just ride their bikes around all day and stop at the café to sit and talk to friends.”
“So they don’t work?” I asked.
“Not really,” he replied.
In fact, as it turns out, most of these people come from affluent backgrounds and are very well educated. They seek to blend in by living in sketchy parts of town and doing nothing. Sadly, this appears to be setting the tone for the rest of the country.
Meanwhile, in the greater French economy things are falling apart. Currently, economic growth in France is virtually non-existent and the unemployment rate sits at eleven percent. Even worse, public debt is 95% of gross domestic product which is a horrible harbinger of things to come.
In fact, things are so bad that the great Socialist (and playboy) President Francois Hollande is resorting to . . . hang on to your hat . . . possible tax cuts to stimulate economic growth. It seems that in France being generally “bobo” isn’t working out so well.
If we’re not careful, the United States will soon find itself in a similar situation. Rich or poor, work will get a bad reputation until eventually, no one will really want to do much of it at all anymore.
Pass more laws like the Affordable Care Act and pretty soon people won’t need to work. That is, of course, until that inevitable day when the country wakes up to find that there aren’t any taxpayers around any longer to foot the bill.