Thursday, July 24, 2014

Beware the law of unintended consequences

#Obamacare, love it or hate it, was ruled a tax and has been the law of the land for a while now. It enjoys a rare status as being the most partisan law the democrats ever passed since Jim Crow, with Zero republican votes.

Just recently it came before the courts again reguarding subsidies, with one saying the feds can give subsidies to those buying from the federal exchanges and another saying only state exchanges qualify.

It should be noted that one of my favorite sayings is the best way to repeal a bad law is to fully impliment it.

What looks likely to me is that the supreme court will bar the IRS from giving subsidies to people in states without state exchanges, as that was the wording and intent of the law. Those exluded from subsidies would largely be republican states that didn't want anything to do with Obamacare.

But there are two consequences to this.

First, the intended is that the people in these republican states will cry foul and put preasure on the states to comply with DC. This was slated to be a key strategy for the democrats to take control of state governments, and it may just work out as planned if it angers enough poor voters.

But the unintended outcome is that, in those states that rejected obamacare, the employer mandate is also unenforceable, because they have the same language requiring a state exchange. So what is likely to happen is that the states that opted out, largely republican states, will effectively have a $8,000 per employee tax advantage over democrat states that adopted Obamacare. In other words, it will cost A LOT LESS to employ someone in a republican state than a democrat one.

This accidental tax advantage could, single handedly, destroy the economies of every democrat state for decades to come as manufacturing leave by the droves. It will also drive prices up for those businesses that stay, making a gallon of milk or a burger noticeably more expensive in democrat states, where the poor will have healthcare but be unable to afford food. The poor in dem states will have an impossible time finding work, while republican states will be paying well over the minimum wage with full employment for everyone that wants to work.

This would turn a lot of boarderline states into Detroit over night, the rest would fall a few years after that.

In essence Obamacare would become an $8,000 per employee tax that only applied to democrats, signed into law by only democrats, with republicans getting to opt out of the biggest tax in history.

And it wouldn't be the first time a policy backfired.

The dream act and the refusal to enforce dreamer deportations has exploded on our boarder and has directly led to the deaths and rapes of thousands in Texas alone.

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