Tuesday, November 11, 2014

Dr. Gruber, ACA architect, admits they lied—but for a good cause

“This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies. [In other words they committed fraud.] Okay, so it’s written to do that.  In terms of risk rated subsidies, if you had a law which said that healthy people are going to pay in – you made explicit healthy people pay in and sick people get money, it would not have passed… Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical for the thing to pass. It’s a second-best argument. Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not.”

Dr. Gruber: A lot of people weren’t stupid, many of the violations and problems were noted early on, but Obama controlled both houses of Congress, and even then it only passed by one vote.  Last Tuesday, many Democrats lost their jobs, thanks to your lies,  although to listen to the media and the president, they can’t figure out why.

American economic policy hides or obscures subsidies or costs—it’s not just the ACA

  • As Dr. Gruber points out, in ObamaCare the healthy cross-subsidize the sick. He does not point out that embedded within this the healthy subsidize the sick for the portion of their sickness related to unhealthy behaviors. A Congressional floor vote to defend such a value choice, if made transparent and explicit, would certainly fail.
  • ObamaCare also forces young people to subsidize older people by limiting the width of premium “rating bands” for insurance sold in the individual market. This was the result of closed-door lobbying by AARP. This one might pass Congress if voted upon explicitly, but the ACA’s architects hid it to avoid admitting that they were shafting young people.
  • Social Security conflates forced individual retirement saving, insurance programs, and massive cross-subsidies, in part to hide the latter.
  • So does Medicare. The biggest cross-subsidies are across birth year cohorts but there are plenty of others as well. Don’t get me started on trust fund accounting.
  • The employer-side half of FICA payroll taxes that finance most of Social Security and part of Medicare are often framed as if they “are paid by the employer” when their true economic burden is borne by the employee in the form of lower wages. If all FICA taxes were imposed on the employee-side they would be more transparent and less popular.
  • A minimum wage increase forces low-skilled unemployed workers to subsidize the wages of the low-skilled employed. Expanding the earned income tax credit is a more transparent way to help the low-skilled unemployed but it puts the costs on budget and in full view. The Left pushes to hide the costs and lies, claiming it’s a free lunch.
  • CAFE fuel economy requirements are less transparent than a gas tax that would achieve a similar goal. But gas tax increases are wildly unpopular while raising CAFE standards appear only to make things harder “on the auto companies.”
  • A global CO2 cap-and-trade system would have obscured the redistribution of global economic growth from developed economies to developing economies. An explicit and transparent carbon tax imposed only on developed economies would achieve a similar endpoint but would have made explicit this massive proposed global redistribution.
  • For years policymakers used Fannie Mae and Freddie Mac to subsidize homeowners through hidden credit subsidies. The Left pushed this for low-income homebuyers through affordable housing goals, while elected officials across the political spectrum supported the same thing for all homebuyers through special advantages conferred by government on these two firms.




http://economics.mit.edu/files/6829  In this 2011 NBER research article , Gruber states it is doubtful that health care costs can be controlled through Obamacare.


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