m.nationalreview/article/370542/obamas-work-trap-larry-kudlow I say this because President Obama doesn’t seem to get this. He is hung up on inequality. But why is wealth- and income-inequality bad? If the oil-royalty owner makes $1 million, while the roustabout in the field in North Dakota or Texas or Ohio or Pennsylvania makes $100,000, there is greater inequality, but everybody benefits. What Obama doesn’t get is that the creation of successful millionaires is not a zero-sum game. The millionaire’s success does not come at the expense of everyone else. In fact, that success makes everyone better off. Free-market capitalism should make us all equal at the starting line, and that should lead to better though unequal outcomes at the finish line. The point here is opportunity, freedom, and economic dynamism. More millionaires create healthier economies with more jobs, stronger families, and better lives than our parents and grandparents had. But now comes a new CBO study of Obamacare, which exposes a perverse incentive system that will cause the equivalent loss of 2.5 million jobs over the next decade as people work less, not more. In the Obama scheme, an industrious person climbing the ladder of opportunity is penalized heavily for his or her success. Health-care subsidies are reduced as a result of her higher income, while marginal tax rates go up as she shifts into a higher tax bracket. So she loses the government benefit and her effective federal tax climbs higher. There is no ladder of opportunity here. It’s really a work trap that becomes a poverty trap. It’s similar to the other traps found in welfare, food stamps, unemployment compensation, and the marriage penalty. Democrats defend this work trap as providing more leisure time. But they forget to tell you that the perverse health-care incentives that lead to less work also lead to less income, less wealth, less opportunity, and less economic freedom to prosper. So step back for a moment and look at the contrasting visions of Harold Hamm and Obamacare. Mr. Hamm’s roustabouts and millionaires create huge incentives to work and prosper. President Obama’s health-care plan creates huge incentives not to work, not to supply labor, not to work harder, and not to create the opportunity for a rosier future. The former is an optimistic vision. The latter is profoundly pessimistic. This whole central-planning rigmarole called Obamacare runs counter to the great traditions and values of America. – Larry Kudlow, NRO’s economics editor, is host of CNBC’s The Kudlow Report and author of the daily web log, Kudlow’s Money Politic$.
Posted on: Tue, 04 Mar 2014 05:18:42 +0000
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