The presidency of Barack Obama could not get much worse. That's what we assumed before Wednesday, when the nonpartisan Congressional Budget Office released a critical report that says the president's signature Patient Protection and Affordable Care Act is worse than imagined. It's a massive jobs-reduction law.
The Gazette's editorial board has long explained a simple socioeconomic principle: When government pays people to avoid work, many people avoid work.
The CBO's latest report says the Affordable Care Act will reduce employment by 2.3 million full-time jobs nationwide before 2021. It's not because a bunch of meanies suddenly decided to lay off employees to avoid compensating them with insurance. After all, employers could simply hire people at lower take-home wages to offset costs of the looming health care mandate.
The massive job losses anticipated by the CBO will result from employees quitting jobs or cutting back hours to qualify for free or reduced health care. So we repeat: Pay people to avoid work and they avoid work.
The CBO stated the phenomenon with eloquence.
"The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses' demand for labor," the report explained.
A drop in labor supply causes obvious problems for everyone. It means less production of goods, services and commodities. The government can print all the money it wants. But if Americans compete for diminishing supplies of food, fuel and goods—as a result of 2.3 million people dropping from the workforce—they will find it increasingly difficult to make ends meet. Too much currency will chase too few goods.
The lower labor supply also means fewer Americans paying to fund Social Security, Medicare, Medicaid, welfare programs and an assortment of local and state pensions that are already in peril. We'll beg immigrants to cross our borders just to help pay bills.
The report anticipates a long-term blow to the economy and deficits that will increase by $100 billion each year as a direct result of the Affordable Care Act. The CBO says deficits will increase for one reason: Slower growth in the economy.
For those who don't get the connection, a decreasing supply of labor—as people avoid work to qualify for health care handouts—leads directly to an economic slowdown.
"CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades," the report says.
At this point, President Obama should waive a red flag and ask Democrats to join Republicans in repealing the health care law. The president should apologize for a colossal policy failure and do what's right by his country.
Instead, the White House views a reduction in the labor force as liberating and good. We can't make this stuff up.
"The White House said the possible reduction would be due to voluntary steps by workers rather than businesses cutting jobs—people having the freedom to retire early or spend more time as stay-at-home parents," explained a news story by The Associated Press.
With a failing economy and growing deficits, our economy cannot afford mass government-subsidized avoidance of work.
The federal mint cannot pay for retirements, government, or government aid. Our economy is funded by a majority of individuals producing more than they consume. When they don't, we incur debts, shortages and demoralizing inflation. It's an economic fact President Obama either fails to comprehend or refuses to accept. Either way, his failed health care plan threatens an entire country's economic wellbeing. It is, incredibly, worse than we thought.