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Dependence Day

The corrupting effects of Obamacare.

Feb 24, 2014, Vol. 19, No. 23 • By JAY COST
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On February 4 the Congressional Budget Office dropped a bombshell. Analysts there found that Obamacare’s structure will create an enormous implicit tax on work, such that people on the lower end of the economic scale will have an incentive to quit their jobs or scale back to part time to maximize their premium subsidies. In an earlier study, CBO had estimated that this disincentive to work would destroy the equivalent of less than a million full-time jobs. Now, it projects that an equivalent of more than 2 million jobs will be lost as people voluntarily leave the workforce.

Hey, more time to spend with the kids!

Hey, more time to spend with the kids!

Many liberals celebrated this development. They trumpeted the new possibilities: Parents will have more time to spend with their children, young people more time to go back to school, and so on. As liberal pundit Matthew Yglesias wrote, “If Obamacare really does cause millions of people to voluntarily leave full-time employment, that shows us how much avoidable suffering the earlier system was causing.”

But conservative critics have the better argument. Perhaps the best rejoinder came from Keith Hennessey, former director of the National Economic Council and now a lecturer at Stanford University. At his blog, he finds that the law can trap people just as easily as it can liberate them. A family of four making $35,000 a year would face a steep implicit tax by adding income from a part-time job; in that scenario, the family isn’t working less for the sake of the kids, but “because the government raised [their] marginal effective tax rate and made work less financially rewarding.” This is an excellent point, and speaks to the potential damage that this implicit tax will wreak.

The economic arguments against this disincentive to work, while significant, are not the entirety of the case to be made against it. Indeed, they may not even be the strongest. There are important civic ideals at stake that, while often overlooked, get to the very heart of the nation’s experiment in republican self-government.

What does it mean to be a citizen of a republic? For centuries, philosophers have generally concluded that citizenship has two essential qualities—freedom and equality. In other words, nobody in a republic is your master or lord, and nobody enjoys a higher civic status than you. The state, insofar as it compels you, does so on behalf of everybody. Governmental coercion is legitimate only if it is on behalf of the public good.

In practice, this ideal has been exceedingly difficult to realize. History has shown time and again that republics are often, if not inevitably, corrupted by factional forces who capture the government and twist it toward their own, selfish ends.

The Constitution, with its labyrinthine system of checks and balances, is an effort to mitigate this danger. Importantly, the anti-Federalist insistence on a Bill of Rights was seen as an extra safeguard against corrupting influences. By their reckoning, even if government fell into the “wrong hands,” it would be limited in what it could do to you, and by extension to the republic itself.

Nowadays, we are wont to correlate liberty with dynamism. A free society is one where risk takers can innovate, create new solutions to problems, and make everybody better off. There is no doubt that all of this is true. Even so, it would be anachronistic to see the Founding generation as making the same arguments. Liberty was essential primarily because of its civic benefits, above all as a bulwark for true republicanism against the despotic pretensions of the likes of King George III.

We cannot reconcile these republican notions with Obamacare’s disincentives to work. If we take the Framers’ hard-earned lessons seriously, the sort of clientelistic relationship that exists under Obamacare is incompatible with authentic citizenship. The problem arises from two different directions.

First, a government captured by factions will simply have more power than it previously did. Once people come to depend on those benefits, they will have little choice but to abide by whatever strings the government chooses to attach.

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