GOVERNMENT SLOWDOWN, DAY FOURTEEN
Feeling . . . weak. Starvation from lack of nonessential government services imminent. Goodbye, cruel world. Tell my wife I love her.
. . . .
. . . .
. . . .
I leave you with a quote from Zombie, courtesy of Hot Air Headlines. This follows up on my post from last night about the sudden cliff that people fall off of once their income exceeds 400% of the “poverty” line:
The author, Kathleen Pender, correctly points out that there is now a huge and abrupt “cliff” in health care costs for many Americans: earn $1 more than the prescribed limit for being on the federal health-subsidy dole, and you’ll have to pay many thousands — even tens of thousands — of dollars more next year for health insurance than you would otherwise. So obviously the smart thing to do would be to find ways to “lower your income.”
After recommending a few accounting tricks (but also noting that most standard tricks won’t work), on page 2 of the article Pender gets to the point:
“You can also consider reducing your 2014 income by working just a bit less.”
This, right here, is the toxic essence of the Welfare State. It’s already been proven over and over that for the lower classes welfare incentivizes permanent dependence: Since one gets more money receiving a raft of federal entitlements than one would get earning a salary at a low-level job, it’s a rational economic decision to remain unemployed, on purpose. Which millions of Americans do, generation after generation, creating a permanent underclass that only consumes the common treasury without ever contributing anything to it.
Again: pay people more to work less, and you should not be shocked when people work less. Penalize businesses for expanding and employing people full time, and you should not be shocked when businesses stay small and make more people part time.
These are such obvious “unintended” consequences that it’s hard to believe they are truly unintended. One cannot be blamed for suspecting that this system was designed, specifically, to create a class of dependents who will always vote for the party of giveaways.
UPDATE: daleyrocks writes:
Patterico – I think there is a serious problem with this notion of a “sudden cliff” regarding Obamacare subsidies which you referenced in your Day 13 and Day 14 Shutdown posts. It is true that eligibility for a subsidy disappears above certain income level, the problem is that below that income level the subsidy is not an all or nothing proposition, it is phased out based on income, just as deductions are in the tax code, as you reach the threshold income level – say 400%.
At 399% of poverty you are basically eligible for squat in terms of a subsidy. At 200%, your subsidy may represent a significant chunk of the premium.
See my comment 10 to today’s post which includes a link to a subsidy calculator.
Thanks to daleyrocks. I am not in the business of distorting facts, and if the articles I have trusted on this point got it wrong, let’s get it right.
But the truth is, no matter how you slice it, offering goodies for having lower income encourages . . . lower income.
UPDATE x2: daleyrocks adds:
Actually, just reading the SFgate article that was linked in a post linked by gary gulrud on Ace. Phase out is greater at younger ages apparently. Just tested it again using 62 married couple and difference in Calif. between 413% and 400% living in Sacramento was $12,000 per year. I did it earlier with 40 year old in my own zip code and effect was nada. Big dollars are for older folks apparently because that’s where big dollar premiums are – but phase out point is still valid.
Sounds like the numbers in the original article I linked last night were valid, at least for 62 year olds.
oh no ohmygosh hey watch out
Now look – you got your healthcares in my food stamps!!
Yeah well you got your food stamps in my health cares!!
…
MMMMMlicious!
happyfeet (8ce051) — 10/14/2013 @ 8:00 amAnother example of the toxic impact of the Welfare State: Riots and widespread theft in Louisiana and Mississippi Wal-Marts when shoppers’ EBT cards didn’t work.
DRJ (a83b8b) — 10/14/2013 @ 8:10 amWhy on earth do food stamp cards have limits in the first place? That’s just foolishly putting a cap on the multiplier effects.
No wonder there ain’t no jobs.
happyfeet (8ce051) — 10/14/2013 @ 8:14 amGood point, happyfeet. You are going to be my Amir Agha Pasha for Economic Policy and Keeping Up the Morale of the Harem, when I am Sultan.
nk (dbc370) — 10/14/2013 @ 8:17 amsounds like a plan mister
happyfeet (8ce051) — 10/14/2013 @ 8:25 amComment by DRJ (a83b8b) — 10/14/2013 @ 8:10 am
I can’t find the article but in the past couple of years they closed the Walmart in one of the smaller Louisiana towns because the employees were stealing so much stuff.
vor2 (38a889) — 10/14/2013 @ 8:48 amThe latest story is crazy. When I saw the headlines I misread and thought it was in Mass. Sigh… right here in my own state.
I think quite a few people heard “no limit” and called all their friends and neighbors. Sad state of affairs….
Day 14 and Joe Biden is on vacation, which, while may be in everyone’s best interest, should be plastered on every front page of every media outlet. But isn’t. Talk about sending a damaging message…but of course, that only works one way.
http://www.weeklystandard.com/blogs/bidens-vacation-camp-david_762467.html
The vice president is also there with “essential” government workers, who must work despite the government shutdown. That includes his Secret Service detail, as well as the Secret Service details assigned to the rest of his family, and other support staff. They are protecting the Bidens as they vacation — but aren’t getting paid because of the federal shutdown.
Dana (6178d5) — 10/14/2013 @ 8:57 amO/T but did you ever have the feeling that maybe they knew something you didn’t?
http://www.youtube.com/watch?v=jKo6Xy3a7do
I hate that feeling.
http://www.youtube.com/watch?feature=player_embedded&v=HT_PClBc8vE
Big band music always makes me feel better.
Steve57 (4bf843) — 10/14/2013 @ 9:13 amDay 14 …
food supplies (mostly cats) running low … dogs are nervous … must remember to put out milk and traps to replenish tonight …
motorcycle gangs during morning commute seemed to have leveled off, only 3 “incidents” this AM …
JeffC (488234) — 10/14/2013 @ 9:40 am“This follows up on my post from last night about the sudden cliff that people fall off of once their income exceeds 400% of the “poverty” line”
To describe the cut off of federal Obamacare subsidies as a sudden cliff is an extreme distortion. The phase out of the subsidies occurs as income rises within limits set by the government and does not suddenly drop off a cliff when income exceeds a certain threshold. By the time an individual or family’s income has exceeded that threshold, the calculation of their subsidy would have been nil.
There are any number of Obamacare subsidy calculators on the internet for people to verify what I am saying. Plug in different income levels, family sizes, etc. The less money you make, the higher the subsidy, but there is no dramatic cliff.
I used the Kaiser calculator:
http://kff.org/interactive/subsidy-calculator/
daleyrocks (bf33e9) — 10/14/2013 @ 9:58 amThe income effect was well demonstrated in Sweden years ago. The country had a steep rise in income tax rates at a point that affected senior doctors in the health system. They were the group most affected so they would leave the country for the months of October through the end of the year. They spent those months in warm vacation spots. It got to the point that there were no senior doctors for the last three months of the year.
Sweden was a nice experiment in economics. They also had a scandal in which senior doctors would be spending their time in the outpatient clinics and leaving the junior trainees to care for the hospitalized sick. The reason was that outpatient visits brought higher payment than hospital care even though the later required more experience. The result was called “The Seven Crown Reform.” It consisted, of course, of reducing payment fr outpatient care.
MikeK (dc6ffe) — 10/14/2013 @ 10:02 amSome people still know how to survive in California.
http://www.chicagotribune.com/news/sns-rt-us-usa-hunter-california-20131014,0,7312513.story
elissa (ad9aa3) — 10/14/2013 @ 10:09 amThis explains why hospital patients are constantly being stolen out of their rooms in Wallander episodes.
Sarahw (b0e533) — 10/14/2013 @ 10:10 am“This explains why hospital patients are constantly being stolen out of their rooms in Wallander episodes.”
Sarahw – I hate it when that happens. That’s why I have tried to avoid hospitals for the dozen or so years. I don’t want to wake up and find myself stolen!
daleyrocks (bf33e9) — 10/14/2013 @ 10:13 amIf there was a ‘fix’ we’d have already found it by now.
http://minx.cc/?post=344137
gary gulrud (dd7d4e) — 10/14/2013 @ 10:50 amUPDATE: daleyrocks writes:
Thanks to daleyrocks. I am not in the business of distorting facts, and if the articles I have trusted on this point got it wrong, let’s get it right.
But the truth is, no matter how you slice it, offering goodies for having lower income encourages . . . lower income.
Patterico (9c670f) — 10/14/2013 @ 10:51 amoffering goodies for having lower income encourages … lower income
it also encourages unreported income, and the more unreported income you have the more rationale you have for a robust police state led by fascist whores like Lois Lerner and the piggy piggy NSA poofterboys
happyfeet (c60db2) — 10/14/2013 @ 11:10 amPatterico – Following gary’s link to a post at Ace’s which includes a link to a post at SFGate which supposedly illustrates the “sudden cliff” concept for a California couple in their early 60s, their example does show significant savings from moving from slightly above 400% of poverty level to slightly below and receiving a significant subsidy. I could roughly duplicate a similar calculation.
The calculations I played around which led to comment 10 with were for younger individuals or families in my own state and the basic conclusion stands. A phase out occurs below 400% of poverty level.
It appears the extent of the phase out is age dependent, which makes sense, since premiums are age dependent.
daleyrocks (bf33e9) — 10/14/2013 @ 11:16 amMr. Feets – Is there any place on the innertubes what can alert me to a WalMart stampede near me in case somebody needs to pick up a few items.
Asking for a friend.
daleyrocks (bf33e9) — 10/14/2013 @ 11:33 amUPDATE x2: daleyrocks adds:
Sounds like the numbers in the original article I linked last night were valid, at least for 62 year olds.
Patterico (9c670f) — 10/14/2013 @ 11:33 am“Sounds like the numbers in the original article I linked last night were valid, at least for 62 year olds.”
Patterico – Might could be.
Remember the subsidies were geared to prevent people paying above a certain percent of their income (9.5%? for a single person) for health insurance. The Administration tried to keep “premium increases lower than projected” by telling insurers to increase deductibles, but there is still incredible sticker shock around the country. Premiums increase as you age, so the premium to income ratio may easier to exceed the closer one is to becoming a seasoned citizen. That is why I am guessing the example in you post last night or in the SFGate article would not work with a much younger couple at the same income level, because the premium would be significantly lower.
daleyrocks (bf33e9) — 10/14/2013 @ 11:56 amThere is the thought that the ObamaCare crashing is a feature, not a bug:
MD in Philly (f9371b) — 10/14/2013 @ 12:20 pmhttp://www.forbes.com/sites/theapothecary/2013/10/14/obamacares-website-is-crashing-because-it-doesnt-want-you-to-know-health-plans-true-costs/
It gets weirder.
I took a look at what constitutes “income” in computing the subsidy, and see that it is Modified Adjusted Gross Income (MAGI). Which is basically the AGI at the bottom of page 1 of Form 1040, plus Social Security income and some unlikely things.
But one of the things that is included in MAGI is the deduction for a self-employed person’s medical insurance. Which, without the subsidy is huge, but if they qualify for the subsidy is not huge. There is a region of 10 or 20 thousand dollars here where qualifying for the subsidy disqualifies one for the subsidy in an endless loop.
Now, if your unsubsidized calculation is what is used (and it probably is since the subsidy is an after-the-fact tax credit, come to think of it), then here is a fine place to game the system by picking as expensive an unsubsidized plan as you need to get under the $62K number.
This also works best for older people, so if you are around 60 and self-employed, DO NOT ASSUME you will not get a subsidy. And the best part? The tax refund/subsidy money is not itself taxable.
Originally I thought that Obamacare was going to screw younger people. Now I can see I was wrong. It is really going to screw young people. But that’s OK, I’m an old fart and it’s looking more like “I’m all right, Jack.” Screw guilt.
Kevin M (bf8ad7) — 10/14/2013 @ 12:22 pmI’ve been trapping rabbits out in the vegetable patch.
As the shutdown goes on, I’ve noticed the wolves have been howling closer and closer to the homestead. Looks like I may have to start sitting up nights setting a watch over the sheep. Yarding them up by the house isn’t any guarantee anymore now that they’ve grown bolder what with the NPS turning feral.
Speaking of which, I think an NPS ranger clawed one of my horses last night. I could tell by the tracks. And the junk food wrappers. I think with some salve and no talk of monuments she’ll be OK.
Last trip to civilization went well. Holed one kayak and lost some Reese’s Pieces but otherwise no casualties. Fixed the boat with some left over JB weld. Picked up plenty of yeast for the home brewery. Me and the girls are already running low on batteries for the sex toys, though. Looks like another raid on the ville is in the near future.
Developing.
Steve57 (4bf843) — 10/14/2013 @ 1:10 pmTrapeze is still in good repair.
Steve57 (4bf843) — 10/14/2013 @ 1:14 pm“It is really going to screw young people.”
Kevin M – Agree 100%.
Bet They’re glad they voted for Obama, twice.
daleyrocks (bf33e9) — 10/14/2013 @ 1:28 pmGot this in e-mail. Normally I don;t pay attention to such things, but this one seems to make at least a little sense. What do you guys think?
Diffus (48ae73) — 10/14/2013 @ 1:28 pmThat’s why I thought to mention the trapeze. As long as you’re getting screwed…
Steve57 (4bf843) — 10/14/2013 @ 1:41 pmThere is the thought that the ObamaCare crashing is a feature
Occam’s Razor says: incompetence and/or graft.
Kevin M (bf8ad7) — 10/14/2013 @ 1:43 pm“Looks like I may have to start sitting up nights setting a watch over the sheep.”
Steve57 – As far as I’m concerned, what happens between you and the sheep at night can stay between you and the sheep.
daleyrocks (bf33e9) — 10/14/2013 @ 2:21 pmMr. daley the *best* way to find out if you won the EBT showcase showdown at Walmart is if you have a friend in the EBT community with a prepaid cellphone what can text you
barring that you should remember a few simple EBT shopping best practices
1. Try to minimize your time in jail. When you’re in jail you’re really a lot unlikely to be given an EBT shopping spree furlough. This hardly ever happens in fact.
2. You need a car what’s in good working order. This means you don’t want to have a bunch of stolen crap in your trunk. You never want to be that guy what has to ditch stolen goods in the Walmart parking lot to make room for your sweet sweet EBT loot.
3. Try to minimize drug consumption during Walmart store hours. You never know when you’re gonna get that text, and you want to be sharp and focused or you’ll end up with a cart full of Great Value brand potato chips or something stupid like that – nope – you gotta go for the good stuff, but remember this will mean sorting through a lot of brands and packaging configurations you might not be very familiar with.
Good luck Mr. daley! You’re well on your way towards getting the most out of your EBT card I think.
happyfeet (c60db2) — 10/14/2013 @ 2:40 pmAnd so it shall be!
See how pleasant every thing can be when you’re not forcing people to cater events, gay people?
Steve57 (4bf843) — 10/14/2013 @ 2:49 pmXO, take a note. OPS O, make it happen.
Steve57 (4bf843) — 10/14/2013 @ 2:51 pmI had thought that today was a national holiday, but no – with the shutdown, all holidays are cancelled.
Amphipolis (e01538) — 10/14/2013 @ 3:15 pmThe cliff works like this:
First you have to qualify @ 400% of poverty for your family size. Once you do that, you get a subsidy of [COST-OF-SILVER-PLAN] – (9.5% * income).
For older people that cost number is almost always thousands of dollars over the income at the cut-off. For younger people not so much, and for the very young they will prob ably never get a subsidy.
There are also extra co-pay subsidies at the actual poverty level area, but that really isn’t part of this discussion.
Kevin M (bf8ad7) — 10/14/2013 @ 8:11 pmThere’s actually a worse cliff at 400% of poverty level. The subsidy is based on your 2012 income but is recalculated on your 2014 tax return. If you make more money in 2014 than in 2012, and don’t inform the exchange, you have to pay back the excess subsidy. This can amount to thousands of dollars.
UNLESS…you are still below 400% poverty level. In this case the repayment is capped at $400 ($250 if single.)
I predict a crisis that will need solving at the end of 2014.
I have details on my blog: http://supertaxgenius.blogspot.com/2013/01/helathcare-law-obamacare-affordable.html
Kirk (ae85d7) — 10/16/2013 @ 8:58 pm