Fighting the Zombies

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Bryan Caplan offers up a criticism of the House healthcare reform bill:

The Krugman we’ve got is sold on the House health bill.  But the Krugman we had, the thoughtful economist who wrote The Accidental Theorist, would have responded differently.  Krugman Past, unlike Krugman Present, would have pointed out that when the unemployment rate is 9.7%, it’s a bad idea to legislate an 8% payroll increase on businesses that fail to offer health insurance.   Employers are reluctant to hire workers at today’s wages; how are they going to feel once the marginal worker gets 8% pricier?

It’s not just Krugman who should be against such legislation at a time like this; so should any sensible Keynesian.

“At a time like this.”  I think I’ve read critiques similar to this about a thousand times now.  I guess it sounds mighty clever, hoisting Keynesians by their own petard or something.  But it’s nonsense.  The “pay-or-play” payroll tax increase doesn’t go into effect until 2013 — and if the recession isn’t over by then we’ve got way bigger things to worry about than a minor increase in payroll tax receipts.

Ditto for Waxman-Markey, which frequently gets the same treatment.  But W-M won’t have any effect on energy prices for years, and even when it does the impact will be tiny at first.  Like healthcare reform, it won’t have the slightest effect on the recession because it won’t take effect until well after the recession is over.

If you want to argue that higher payroll taxes are bad in general, then fine.  I might even agree with you depending on what alternative you offer up.  But leave the recession out of it.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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