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Guest Post: ObamaCare: The Neutron Bomb That Will Decimate Employment

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

ObamaCare will act as a neutron bomb on employment in the U.S. for two basic reasons.

Longtime readers know I have repeatedly explained why healthcare, i.e. sickcare, will bankrupt the nation. Here are two of the dozens of entries I've written on sickcare:
America's Hidden 8% VAT: Sickcare (May 10, 2012)
Can Chronic Ill-Health Bring Down Great Nations? Yes It Can, Yes It Will (November 23, 2011)
I have also explained why ObamaCare's "fixes" are simulacra reforms that don't even address the systemic costs arising from the cartel-fiefdom structure of sickcare:
Why "Healthcare Reform" Is Not Reform, Part I (December 28, 2009)
Why "Healthcare Reform" Is Not Reform, Part II (December 29, 2009)

Sickcare is unsustainable for a number of interlocking reasons: defensive medicine in response to a broken malpractice system; opaque pricing; quasi-monopolies/cartels; systemic disconnect of health from food, diet and fitness; fraud and paperwork consume at least 40% of all sickcare funds; fee-for-service in a cartel system; employers being responsible for healthcare, and a fundamental absence of competition and transparency.
Please glance at these charts to see how the U.S. healthcare costs are double those of competing nations on a per capita basis. Japan provides care for a mere 36% per person of what the U.S. spends--yet millions of Americans remain uninsured or underinsured.
If you set out to design a corrupt, inefficient, wasteful, unfair, deranged and unreformable system, you would arrive at U.S. healthcare.
Sickcare ignores the structural causes of our ill-health:
86% of Workers Are Obese or Have Other Health Issue Just 1 in 7 U.S. workers is of normal weight without a chronic health problem.
The Patient Protection and Affordable Care Act (PPACA), i.e. ObamaCare, is a neutron bomb for employment. A neutron bomb is an enhanced-radiation thermonuclear weapon that famously leaves buildings, autos, etc. intact but kills all the people, even those inside buildings, vehicles, etc.
ObamaCare will act as a neutron bomb on employment in the U.S. for two basic reasons:
1. It is immensely complex, and already-marginalized small business owners will shed employees or simply close rather than have to figure out what all those thousands of pages of regulations and statutes mean to the survival of their business.
2. ObamaCare's primary mechanisms of lowering costs, insurance exchanges and technocratic selection of "best care practices," do nothing to change the systemic flaws of sickcare.
Many other commentators have already outlined how ObamaCare is driving employers to replace fulltime workers with part-time workers to avoid having to pay outrageously expensive monthly healthcare insurance premiums. In this sense, the ObamaCare neutron bomb is already decimating fulltime employment.
I see this response as a Corporate-America strategy. Corporate America has the human resources infrastructure and financial heft to figure out compliance and exploit loopholes in the insanely complex law. Small business has neither the infrastructure nor the financial resources. Small business owners will rely on the same cartels that are currently providing insurance for guidance, and of course the ObamaCare offerings will suit the financial needs of sickcare cartels.
Once small business owners see the costs of their options, some may opt to pay the penalties and others may follow the corporate strategy of turning each fulltime job into two part-time jobs to avoid paying for coverage or penalties, but many will choose instead to call it quits: either downsize to a one-person/one-household business with no employees at all, or sell/close the enterprise and escape the burdens.
What the lobbyists and attorneys who wrote the Obamacare monstrosity do not understand (because they have no exposure to or experience in the real economy) is the fragility of most small businesses: costs keep rising but revenues are stagnant. The mental and financial stresses keep rising, and ObamaCare does nothing to mitigate either source of stress.
The inside-the-Beltway types who crafted this mess have no idea of the pressures facing legitimate (non-black-market) business in America, corporate and small business alike.
ObamaCare offers even more incentives for Corporate America to offshore operations, and it provides powerful incentives to millions of marginal small businesses to shut down or shed all employees.
I am not alone in simply not wanting to waste the time, money and energy required to understand the new law and its various impacts on my business. We will cling to our already insanely expensive private healthcare insurance, which by the way has been grandfathered in: new self-employed entrepreneurs won't be able to buy the absurdly costly policy we have--they will be offered a range of even worse deals, with higher costs and less coverage.
The neutron bomb has gone off, unseen by politicos and the Elites who wrote the bill. It is already decimating fulltime employment, and it will soon add momentum to the free-fall erosion of small business growth and employment.
The strip malls and office parks will still be standing; there just won't be many employees in them.
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Fri, 02/22/2013 - 13:54 | 3267458 Dingleberry
Dingleberry's picture

Dutchie.....it is. See you at the bottom.

Fri, 02/22/2013 - 11:25 | 3266897 lakecity55
lakecity55's picture

So, was this  the main WMD in the Cloward-Piven strategy?

Fri, 02/22/2013 - 11:26 | 3266906 toys for tits
toys for tits's picture

The 30 hours is the new work week.

This will result in some new part time hirings, which will offset the full-time firings.

Fri, 02/22/2013 - 11:30 | 3266926 Tijuana Donkey Show
Tijuana Donkey Show's picture

I believe the GOVT calls this job creation. For every 4 full time jobs, I can create 5 part time jobs. It's like fractional reserve employment.I think I need to run for CONgress. 

Fri, 02/22/2013 - 12:02 | 3267093 El Crusty
El Crusty's picture

yup, and i was just in lowes the day before yesterday. they had a big "now hiring" sign next to the front door with all the positions listed- seasonal employment ( part time ) shelf stockers ( part time) cashiers ( part time) garden center workers ( again, part time)

there are no more full time jobs avaliable for the average hourly worker period.  the hourly workforce is quickly turning into a "new normal" where you have to work 2 or even 3 part time jobs just to get a full work week.

Fri, 02/22/2013 - 13:20 | 3267352 seek
seek's picture

I saw the same at my doctor's office, of all places. He has a tough timebeing profitable as is, with O-care he had to make his full-time staff part time, and then had to bring in part-time staff to make up the deficit in hours.

I talked with him about it, he said his two choices were to move staff to part time and add staff, or move staff to part time and drop one day that the office is open (thus reducing revenues) he was open to reducing open hours, but fixed costs were eating him alive.

I am so fucking happy the last employee I had in my business left 11 years ago. I have nothing against people working for me, but have issues with the government making it unaffordable to do so.

Fri, 02/22/2013 - 13:53 | 3267449 DoChenRollingBearing
DoChenRollingBearing's picture

Great anecdote.  This looks to be an unfortunate model for small business everywhere here in the USA now.  Our small business is in Peru.  No such burden there, yet anyway.

And I think I will have more of my own medical work done there as well.

Fri, 02/22/2013 - 11:29 | 3266919 howenlink
howenlink's picture

I can't find the freeking Fast Forward button, the Rewind button, or the Pause button.  What the heck kind of system is this?!?

Fri, 02/22/2013 - 15:30 | 3267755 Anusocracy
Anusocracy's picture

There is only a self-destruct button.

Fri, 02/22/2013 - 11:30 | 3266920 yogibear
yogibear's picture

Bubble Bernanke and the Fed will just keep being the buyer of last resort for US debt.

Their on their way to following Japan in the Zimbabwe economic plan.

The US follows Japan in a currency crisis  some time later.

Bernanke and the Fed laid out their cards.

The Fed has no exit plan because they cannot exit. They all know this in the Federal Reserve.

Continuation until the dollar blows up. Zimbabwe financial system or bust!

Fri, 02/22/2013 - 11:31 | 3266929 secret_sam
secret_sam's picture

The ACA is shit, definitely, but let's get real.  The system was totally fucked WAYYYYY before "ObamaCare" came along.

The real issue is Medicare.

Fri, 02/22/2013 - 11:33 | 3266941 lakecity55
lakecity55's picture

Insurance companies should be able to do business over state lines. A compnay in Idaho might offer better plans for you than one in your state, IMO.

Also, restrain tort lawyers.

Fri, 02/22/2013 - 11:36 | 3266967 mayhem_korner
mayhem_korner's picture

restrain tort lawyers.


That conjured up images of almost-VP John Edwards, which made me throw up a little...

Fri, 02/22/2013 - 14:21 | 3267530 mercenaryomics
mercenaryomics's picture

Haven't you been listening to glorious leader? Commerce over state lines sounds dangerously close to "free markets." I'm sorry but I'm forced by big sister to say something when I see something, I must report you to my local drone operator. Actually, I'm not sorry, for every suspected domestic terrorism report I file, I get an extra chocolate ration. 

Fri, 02/22/2013 - 15:12 | 3267699 MachoMan
MachoMan's picture

Could you please articulate the problem with tort lawyers and the "broken malpractice system"(O.P./author)?  I see this a lot, but I'm curious of your bases.  Is it that malpractice insurance is too costly?  That there are too many large jury awards for malpractice?  Please advise.

Fri, 02/22/2013 - 11:40 | 3266985 L_Conquistador
L_Conquistador's picture

But now everyone is required to participate and take a bite of the she-ite sandwich.  We'd be better off to go back to the Wild-West every man for himself healthcare system.  If some fat ass wants to drink big gulps all day, get diabetes, and ride off into the sunset, let him.

Fri, 02/22/2013 - 12:14 | 3267136 secret_sam
secret_sam's picture

"Requirements" that you can ignore really aren't, if you think about it.  And we pay for every fat ass as soon as they've lived long enough--that's been around a long time.

The real issue is Medicare.  It is basically the SOURCE of every single one of the truly fucked up aspects of the US healthcare industry.

Fri, 02/22/2013 - 11:31 | 3266932 stant
stant's picture

"down to one person business" allready there

Fri, 02/22/2013 - 13:28 | 3267378 joego1
joego1's picture


Fri, 02/22/2013 - 11:32 | 3266933 busted by the b...
busted by the bailout's picture

"The neutron bomb has gone off, unseen by politicos and the Elites who wrote the bill. It is already decimating fulltime employment,"

I'm not saying it won't have any effect, but it should be showing up in the withholding tax data, jobless claims, and employment numbers, no?  I don't see it yet.

Fri, 02/22/2013 - 12:20 | 3267152 aardvarkk
aardvarkk's picture

If the Fed stopped printing to the sky, I bet you'd notice something.

Fri, 02/22/2013 - 14:40 | 3267592 Umh
Umh's picture

Having your hours reduced doesn't make you unemployed.

Fri, 02/22/2013 - 11:33 | 3266942 Seasmoke
Seasmoke's picture

If you ask to work over 30 hours one more time , you are fired !!

Fri, 02/22/2013 - 11:34 | 3266943 Bicycle Repairman
Bicycle Repairman's picture

Will you people with wealth just give it up and die already?  The "economy" thanks you.

Fri, 02/22/2013 - 11:48 | 3266951 mayhem_korner
mayhem_korner's picture



Once the relationship between the payer and the beneficiary is broken (or socialized), the wheels are off.  Healthcare is no different than anything else.  Indeed, it is the poster child of brokenness, the mother of all dumping grounds for free-ridership and fiscal malevolence.

Fri, 02/22/2013 - 11:35 | 3266952 trillion_dollar...
trillion_dollar_deficit's picture

I maintain this law will never be implemented to full effect. The biggest mistake made by proponents of this piece of shit is attaching Obama's name to it. Once its effects truly begin to be felt, there will be less and less incentive for them to fight for it given that Obama has already won reelection and he will no longer be president in 2017. On top of that, they all are slowly coming to realize how difficult it will be to implement and how far reaching the unintended consequences will be. I expect implementation to be delayed past the 2014 midterm, so the Democrats up for reelection can try to escape the impending debacle that will consume the first 2-3 years of what will end up being the short life of this bill.

Fri, 02/22/2013 - 12:35 | 3267210 gamera9
gamera9's picture

No consequences for dems, with MSM help they will blaime it on the repub, or Bush.

Fri, 02/22/2013 - 14:02 | 3267482 Meat Hammer
Meat Hammer's picture

And that's all part of the master plan.  Blame the destruction of the economy on capitalism and its supporters, the GOP.

Fri, 02/22/2013 - 14:10 | 3267505 secret_sam
secret_sam's picture

What do you mean "attaching Obama's name"?  It's called the Affordable Care Act.

The fact that it's called "ObamaCare" is just evidence of how effective the Republican-leaning elements of the press are at indoctrinating their victims.

For some reason, no one refers to the prescription-drug benefits added to Medicare in '03 as "DubyaCare."

Fri, 02/22/2013 - 14:37 | 3267582 RSBriggs
RSBriggs's picture

There ARE no "Republican leaning" elements of the press...

Fri, 02/22/2013 - 16:23 | 3267926 secret_sam
secret_sam's picture

You've never heard of the Wall Street Journal or the New York Post, huh?

I guess I'm not surprised.  You must be getting your news from USA Today or something.  Heh.

Fri, 02/22/2013 - 15:23 | 3267729 trillion_dollar...
trillion_dollar_deficit's picture

What do you mean "attaching Obama's name"?  It's called the Affordable Care Act.

Its coloquially refered to as Obamacare. Even Obama doesnt mind the name since he has stated that the law shows that "he cares". You and other proponents may not like that. But, deal with it.

Fri, 02/22/2013 - 16:21 | 3267908 secret_sam
secret_sam's picture

It's a Republican talking-point to call it "ObamaCare."  Just like the estate tax is the death tax.

What's interesting about our propaganda system is that so few people even *realize* they're brainwashed by the media.

(PS: Not that it matters, but I'm completely opposed to the law, as would be obvious to anyone with the most rudimentary reading comprehension.  I'm sorry your schooling failed you.)

Fri, 02/22/2013 - 11:35 | 3266953 Tsar Pointless
Tsar Pointless's picture

If any of you people still believe that our "legislators" write these bills, when you already know they don't READ them, you are not worthy of taking another breath.

So, those of you of this mindset, kindly refrain from oxygen intake, and do your part in allowing a decrease in healthcare costs.

Fri, 02/22/2013 - 11:49 | 3267035 mayhem_korner
mayhem_korner's picture



I for one believe that our legislators can neither read nor write.

Fri, 02/22/2013 - 11:36 | 3266959 Marley
Marley's picture

Yeah, and don't forget about the shadow market and free trade.  Those really helped employment.

Support this website, Buy Gold

Fri, 02/22/2013 - 11:36 | 3266965 Eugene9876
Eugene9876's picture

This article misses the point. US employment is already decimated, and the powers that be already know that.  Obamacare is simply a mechanism to:

(1) suck up remaining wealth and funnel it into baby boomer health care,

(2) force independent physicians into large collectives and ram underpaying medicare down their throats,

(3) function as a massive new non-outsourcable US jobs program, just like tech in the 1990s, and housing bubble in 2000's, and

(4) then finally collapse in 2021 when the reconciliation mechanism used to pass the bill terminates.  Of course, the health care bubble will be so big at that point, it will be time to "renegotiate" and the providers will have very little leverage in the imploding bubble, and the resulting new gvmt health care system will be much much stingier.


Fri, 02/22/2013 - 11:37 | 3266972 Sizzurp
Sizzurp's picture

Debt tower waiting to crash.  This will probably be what pushes it over.  Someone other than a Marxist "progressive", as they like to call themselves, is going to have to clean house when it's over.  

Fri, 02/22/2013 - 13:26 | 3267370 seek
seek's picture

I think the Marxists are trying to set themselves up to be the clean-up crew. Pretty sure that's in the playbook, crash the existing system intentionally to rebuild it as the one you want.

They, of course. are delusional about how much compliance they will get. The parasites will join right up, but the producers will go Galt on them. That's already happening. The best the can hope for is a broken copy of the Soviet era, and it'll be a shadow of even that. More likely they get a civil war they're not prepared to fight themselves, and many of those that they would send in as proxies are on the other team.

Interesting times indeed.

Fri, 02/22/2013 - 11:38 | 3266980 NoWayJose
NoWayJose's picture

This isn't rocket science - the plan will be to suck as many people into the Obamacare National Plan, using taxpayer money to undercut private insurers.  Once the private insurers go bust (or agree to partner with the Obamacare National Plan and its restrictions), we will see a graduated monthly fee based on income so that the poor get this for free and the rich get soaked.  And, of course, the Obamacare National Plan will need to start rationing care, just as many social medicine countries do.

Fri, 02/22/2013 - 16:19 | 3267902 Westcoastliberal
Westcoastliberal's picture

Apparently, you've not read up on "Obamacare". It is NOT some national insurance plan in lieu of private insurance, rather it is designed to protect their interests. Spend some quality time at this link and education yourself; Jose if you can see it.


Fri, 02/22/2013 - 11:39 | 3266983 Number 156
Number 156's picture

Sorry, but your Nanny State thinking is making you wrong on a couple of points.

Telling people what they cant eat and that they are making poor choices got us here in the mess called universal health care.

All you need to do is enforce the law, and other than law enforcement, government needs to get out of it altogether.

Every time they come to 'fix' something, it ALWAYS ends up like Amtrak or worse.



Fri, 02/22/2013 - 11:50 | 3267042 mayhem_korner
mayhem_korner's picture



+1 Amtrak.  Customer service that has to be experienced to be believed.

Fri, 02/22/2013 - 11:40 | 3266988 ramacers
ramacers's picture

all the better for rivers of blood. gotta happen.

Fri, 02/22/2013 - 11:50 | 3267040 rwe2late
rwe2late's picture

systemic disconnect of health from food, diet and fitness

No disagreement, but other disconnects deserve mention,

such as:

from debilitating workplaces

from polluted environment

from disabling militarism

from Prohibition II and the ancillary mass prison industry

Fri, 02/22/2013 - 14:34 | 3267572 mercenaryomics
mercenaryomics's picture


Maybe your downvoters enjoy GMO food watered from Monsanto-pesticide creek, slapped onto non-decaying constructed "bread" with a patty of diseased-cow-fed cattle and some corn-syrup based condiments colored with artificial red #3 and yellow #24 and flavored with that beaver puss sack stuff. Yummy!

And big pharma along with the prison guard unions fund the anti-pot laws, maybe downvoters prefer having to go purchase drugs through the cartel instead of growing their own substitutes under threat of fines, imprisonment and loss of life.   

Fri, 02/22/2013 - 11:53 | 3267053 q99x2
q99x2's picture

The business model works great. It moves all the wealth into the hands of the most durable and prosperous and then allows them to purchase everything for less until they are sent to prisons. That is how things work so what's the big deal.

Fri, 02/22/2013 - 11:55 | 3267065 silvertrain
silvertrain's picture

im wondering how    "you gotta get your chip or no healthcare"    is going to work out...??

Fri, 02/22/2013 - 11:55 | 3267066 silvertrain
silvertrain's picture

im wondering how    "you gotta get your chip or no healthcare"    is going to work out...??

Fri, 02/22/2013 - 11:57 | 3267067 Waterfallsparkles
Waterfallsparkles's picture

Now under Obamacare there are a lot of drugs and procedures that are no longer available.

My Cousins Dad takes a drug called Xarelo as a blood thinning agent.  This Drug is no longer available to him.

A friends Husband who is now 80 years old is no longer eligible for dialysis.

I guess they will just have to hurry up and die already.

The death squads are now in place and functioning.

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