JLF Western N.C. Blog

Playing Chess with Ornery Pieces

Another excellent article was written by Daniel J. Mitchell of the Cato Institute. He told how CBO estimates, just like ideologue visions of socialistic utopias, assume all people are sinless saints without the slightest self-preservation instinct. He referenced claims about the future of Medicare and Medicaid when they were introduced to show how the CBO is “naïve.”

Mitchell argues that many people react to taxes, and usually in a way that will allow them to keep more of their own money. They will hire accountants to find loopholes, forsake highly-taxed activities to pursue other interests, and even illegally evade taxes. Employers are likely to cancel corporate insurance plans, allowing more people to buy government-subsidized healthcare on the cheap. People on the margin may take advantage of government’s incentive to become a taker rather than a giver. Disincentives for upward mobility injure the tax base overall.

Politicians, meanwhile, are not likely to exercise the restraint the insurance reform bill expects them to. Plans for future savings can always be overruled with future legislation. Oversight committees, touted as being guardians of frugality, will, if history repeats, grow their crises to justify their budgets and further their careers, and need a lot of administrative staff to handle the accountability requirements.

In addition, CBO estimates are ramped up over a ten-year period, so the cost of sustaining the full-fledged program would be much higher. Mitchell believes the costs of the new legislation would be six times higher than the public was told.

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