Guest Post: Obamacare’s Many Negative Side-Effects Should Surprise No One

Tyler Durden's picture

Submitted by Jordan Bruneau via the Ludwig von Mises Institute,

Even left liberals are coming to realize that Obamacare is fatally flawed. Perhaps this is because fewer people will be insured at the end of the year, under Obamacare, than at the beginning of the year as insurers are forced to drop coverage. Stories of such cancellations to cancer-stricken children certainly don’t help matters. For a program whose expressed purpose is to bring insurance to more people, this irony seems even too much for the interventionists to stomach.

Obamacare’s negative effects, however, are simply a microcosm of government policy in general. Virtually all well-intended (assuming they are in fact well-intended) government policies bring negative unintended consequences that hurt the very people they intend to serve. The prevalence of this paradox, called iatrogenics (originally used in the medical context to refer to doctors’ actions that hurt patients), should give pause to those who favor government intervention to solve societal problems.

Take rent control policies, for example, intended to make housing more accessible to those with lower incomes. In reality these policies shrink the amount of available housing because potential landlords have less incentive to rent out, and developers have less incentive to build new, units. As a result, less housing is available for those with lower incomes. Just look at the apartment shortage in New York or San Francisco, the two cities with the most stringent rent-control policies, for proof.

This process of iatrogenics also exists in financial regulation. Polemicist Nassim Taleb has illustrated how increased financial regulation intended to prevent another financial crisis has actually made one more likely. Regulations entrust the fate of the financial system to a handful of big banks because they are the only ones who can afford to comply with them. This consolidation of power among the big banks makes the financial system riskier because if one of these few banks fails the damage will be much greater to the economy than from the failure of one small bank among many. “These attempts to eliminate the business cycle,” says Taleb, “lead to the mother of all fragilities.”

In terms of protecting society’s most economically disadvantaged, sociologist Charles Murray chronicles, most recently in his bestseller Coming Apart, how the federal government’s war on poverty paradoxically hurts the poor. He explains that though welfare benefits are well intentioned, what they in effect do is pay people to stay poor, hurting the very people they intend to help. These misaligned incentives are a leading reason why $15 trillion in welfare spending over the past 50 years has perversely resulted in a 50-year-high poverty rate of 15.1 percent.

Those currently advocating for a raise of the minimum wage should first examine its iatrogenic history of bringing about negative unintended consequences to the very low wage people it intends to help. Minimum wage increases actually hurt low wage earners because business owners lay off staff and cut back on hours to try to recoup their losses from such mandated wage increases. This leaves those with a tenuous grasp on the labor market in an even more precarious position. “Unfortunately, the real minimum wage is always zero, regardless of the laws,” says economist Thomas Sowell, “and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they either lose their jobs or fail to find jobs.”

Of course it’s not only left liberal policies that generate negative unintended consequences that hurt the very people they’re intended to help, but also conservative ones like the war on drugs and the war on terror.

The war on drugs intends to help drug-blighted communities by enacting and enforcing strict penalties on drug use. What it in effect does is hurt these communities by making criminals out of a significant portion of its inhabitants. Drug users now make up nearly 25 percent of federal and state prison inmates, many of whom go in for simple possessions and come out hardened criminals wreaking untold damage on their communities. Even those who do not run afoul with the law again face a lifetime of job and social struggles with a criminal record attached to their name.

The same iatrogenic story exists in the war on terror, which intends to keep us safe by waging a multipronged offensive against potential terrorists and the geographies they may inhabit. Unfortunately, as former CIA intelligence officer Michael Scheuer has illustrated, some of these prongs, such as aggressive drone warfare and support for apostate regimes, actually fan the flames of US hatred making us less safe. “It’s American policy that enrages al-Qaeda,” says Scheuer, “not American culture and society.”

Government intervention, no matter what its form or intention, causes iatrogenics — unintended negative consequences that hurt the very people they’re intended to help. Nowhere is this better exemplified than with Obamacare, a policy intended to bring insurance to all that has in effect taken it away from many. Perhaps the growing coalition of people recognizing this paradox will take this revelation and apply it to other policy arenas as well. For the affected classes, we can only hope.

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wisehiney's picture

Whether you want your cancer, you will keep your cancer.

90's Child's picture

“If ObamaCare had been fully implemented when I caught cancer, I'd be dead.

economics9698's picture

The whole idea of government intervention is to sell shit to the peasants that they don’t need and make a profit for the top 0.01%.  The fact that more people do not recognize a con game when they see it is a testament to our education system, and the natural lack of intellectual curiosity and laziness of people in general.

max2205's picture

Call me when BenYellen can print pills

malikai's picture

For all who haven't yet read it, check out 'Seeing Like a State' by James Scott.

It covers this subject in great detail.

WordSmith2013's picture


A Must Read!


Obamacare: Was the ACA a planned legislative disaster?
Anusocracy's picture

The survival of most everyone's ancestors depended on either a tribal organization, a state hierarchy, or a mix of both, and their behavior towards government reflects that.

Very few base their survival on a culture of freedom and the make-up of the world reflects that.

BigJim's picture

Tut! In a democracy, the government is us! How can 'we' hurt 'us'?

Or to put it another wasy... how can 'us' hurt 'we'?


TBT or not TBT's picture

Government is just a name we give for the things we do together.

Incubus's picture

i dont bomb people with drones


I don't tax people on everything. 


They're taking my taxes and doing shit with it that I don't consent to.

Midas's picture

But when you find out some middle-easterners are having a wedding party and you weren't invited, don't you get the urge to fire up a drone?

A Nanny Moose's picture

They're taking my taxes and doing shit with it that I don't consent to.

Anyone producing anything taxable, is consenting. Period.

youngman's picture

There are people right now that will fall thru the cracks...they will be inbetween their current policy and their new Obamacare where they will not get the drugs or doctors they need and will you think the press will disclose this...never..they are all for the propoganda of the Obamacare..

VD's picture

Obama is a criminal many times over, and this ObamaCare in the end too will cause innumerable 'Merkican casualties...

dick cheneys ghost's picture

obummers crimes are nothing compared to the rothschilds 'debt-slavery' crimes.......infact, the rothschilds are celebrated in tel aviv with street namings and such..........

DaddyO's picture

That may be true but don't let this weasel Obummer off the hook so easily...

His crimes against the Constitution are without parallel in the modern age.

The debt ponzi will crash as it always has and we will rise out of the ashes, as we always have.


Anusocracy's picture

Lest we not forget the real culprit: government.

None of this shit would be happening if 99% of the population were anarchists, instead of 1%.

So, 99 percenters, look in the mirror, and you will see the problem.

artless's picture

I upvoted you for the sentiment but even if our ranks went to over 50% "government" has shown that it has no problem using whatever means necessary to achieve its goals. And there always seem to be plenty of those who have no problem and recognize no immorality in allowing gov't to do their dirty work.

For those who need a translation: That would be ANY of you who get a fucking dime from government. Until ALL people who interact with The Criminal Class of Washington, DC are completely shunned by the rest of society and therefore cut off from all the things they want and need, the shit show will just roll on.


FeralSerf's picture

I agree, Barry's awful.  But as awful as he is, he doesn't hold a candle to Bush and his partner in global murder, Dick Cheney.  Barry's just doing his best to coverup Cheney's tour de force, the terrorist attack on 9/11.

DaddyO's picture

I call BS on your assessment, Obummer is just as culpable as the other two!

He has caused more death, destruction and damage to our reputation the world over than the other two douchebags combined.

Name one thing Obummer has undone...that GWB did. In fact, Obummer has doubled down on most Bush policies.


GetZeeGold's picture




he doesn't hold a candle to Bush






....and still IS.

FeralSerf's picture

Bush and his partner in global murder, Dick Cheney.


Take things out of context much?


To suggest that our current chief puppet is the evil equal of Cheney is demented.  

Flammonde's picture

In many ways the problem is the public and the corruption tolerated. Congress as  whole is no more criminal than the electorate permits.  There may be a solution. I do not see one.  Tyranny exists when the public abdicates responsibility.  Responsibility is not common in Republics.

BigJim's picture

This is a tricky moral conundrum. And one best viewed through an enhancing prism.... for instance: metaphor!

Imagine a wealthy old man is on his sick-bed. When he dies he'll be leaving a lot of money to his heirs.

One of his sons - we'll call him Dubya - depresses a button and disconnects the old man from his life-support, who immediately goes into seizure.

After a few minutes of this, another son - we'll call him Barry - rushes into the room, shouting for all who hear that Dubya is killing the old man! and pushes Dubya off the button. But then pulls out a gun and shoots the old man in the stomach.

Which one is worse? Dubya or Barry?

malikai's picture

Not sure why you got so many downvotes. Did you upset the congregation recently?

Anyway, they're both shit stains that *think* they run things - which is what makes them actually dangerous. Apart from that, they're just least-common-denominator distractions for the livestock. Nothing more.

BigJim's picture

Yes, I probably should have described them as puppets named Dubya and Barry... but then I'd have had to describe who was pulling the strings, etc, how they stood to benefit from the death of the old man, etc.

All metaphors break down eventually, if they didn't they wouldn't be metaphors :-)

tempo's picture

My daughter and her family of five will be without health insurance in a few days. Her policy costing $500/m was cancelled and a new Obamacare policy costing $1200/m with $2000/individual deductible is being offered. Her family income is about $70,000 and can't afford any insurance. But she can afford to see a doctor. she found a doctor who is more than willing accept $80 per visit vs the $25 offered by Medicaid. If the family is faced with the big $100000++ hospitalization she will just have to declare bankruptcy.

nmewn's picture


...if they're so inclined.

Peace & good fortune to you & yours.

wisehiney's picture

Have been hearing/reading good things about that organization.

nmewn's picture

It's not for everybody, everyone has their own lifestyle (this was once you didn't have to choose which rabbit hole to dive down to avoid government over reach)...but it is an alternative, for those who don't drink or smoke & don't get all freaked out because God's name happens to be mentioned.

He seemed like he was searching, I was trying to help for those that lean that way.

Unfortunately I can't, till I clean up ;-)

wisehiney's picture

New Years Resolution. (again)

VD's picture

hey nmewn that healthcare option looks excellent! very reasonable more at cheap.... do you know of someone that had to test it out yet???

nmewn's picture

No, I don't know of anyone, just ran across it the other day. It looks like Freddie has found some more to consider below.

I get mine through my employer, which is on the hit-list of ObummerCare for 2014. Thats when the torches & pitchforks come out.

Freddie's picture

Here are others:


What is pretty cool is Carl Denniger months ago said hopefully if Obama crashes it could help the free market instead of the insurance cartel help solve the healthcare problem.

These Christian plansencourage people to negotiate with the doctors.   Denniger and others say most docs would rather get paid instead of dealing with HMOs.    I wonder if you could combine a lower cost hospital plan with these Christian plans? 

jekyll island's picture


If someone in her family would develop a serious medical condition, THEN they should sign up for Obamacare. Can't be turned away for pre existing condition, remember? Then they would be responsible for only the monthly premium and the deductible.

Freddie's picture

Democrats, idiots, libTurds and evil fuxx voted for this.  Hopefully the libs will drink hemlock - it is covered under ObamaCare.

GetZeeGold's picture



It's covered....but it's wicked expensive.

666's picture

"...fewer people will be insured at the end of the year, under Obamacare, than at the beginning of the year as insurers are forced to drop coverage"

I can't wait to see the statistics on this and other facets of ObummerCare, especially the amount it will add to the budget deficit each year.

sylviasays's picture

If statistics are released by this regime and the compliant liberal press decides to mention them, no doubt those statistics will be heavily manipulated, massaged and mostly fiction. 

James-Morrison's picture

Pay AND die, then pay again (don't forget inhertance tax).

Greenskeeper_Carl's picture

Of course it should come as no surprise. It was never intended to work as advertised. I was intended to fuck everything up so much that people will cry for the govt to come in and fix it, resulting in what the left has wanted for decades- single payer, all govt healthcare system. And it is working. Even if the red side of the power party takes back both houses of congress and the presidency, it wouldn't get repealed anyway. The govt will be forced to take over everything, and the best part is, at least from their perspective is that the people of this country are so hopelessly stupid it will never occur to them that govt intervention is healthcare was the cause of the problems in the first place, and will view more govt as the solution rather than Te cause of all these problems

CunnyFunt's picture

"... and the gun-crime epidemic must be eradicated at its source, etc., etc., etc. ..."

Long-John-Silver's picture

It's actually worked too well. It has shown how incompetent the government is at doing anything (except waging War). Now no one is going to want the government controlling anything, especially government controlled (single payer) health care.

nmewn's picture's a good one:

"When I get back to the office, I turn on the computer to write a progress note in Mr. Edgars’s electronic health record, or EHR. In addition to recording the details of our visit, I must try to meet the new federal criteria for “meaningful use,” criteria that have been adopted by my office with threats that I won’t get paid for my work if I don’t.

Under “History of Present Illness” (HPI), I enter “knee pain.” Up pops a check-box menu: injury-related (surely the chronic wear on Mr. Edgars’s knees from his work as a farmer is some sort of injury, but I don’t think that’s what the computer programmer had in mind), worsening factors (I know of none that apply, since he couldn’t give his own history), relieving factors (there’s no check box for a tired, sleep-deprived wife who’s purposely keeping the dose of acetaminophen low) and so on. Nothing fits, so I exit the HPI and type in “follow-up” (f/u), for which my EHR doesn’t have a pop-up menu. It yields only a blank screen.

I type the Edgars’s story in my own words, so different from the computer-speak generated by the check boxes. I move on to the Review of Systems — another pop-up menu.

I used to simply write “patient is an unreliable historian” at the beginning of this section, but the computer doesn’t understand that this statement could apply to the entire review. Using a template, it generates a page of 13 sentences, one for each body system, and, under each sentence, the option “Positive: Other: unreliable historian.”

Government is a natural clusterfuck.

Greenskeeper_Carl's picture

"It has shown how incompetent the govt is..." I hope you are right but I doubt it. A good chunk of opposition to obamacare comes from people on the left who think it doesn't go far enough. And there is still a huge chunk of society that thinks the govt is the answer to our problems. All of this might be obvious to you and I, but it damn sure isn't to most people who just want their free shit and don't care who has to be robbed or harmed for them to get it. And they will want govt controlled healthcare when they are told that the private sector an the greedy capitalists have destroyed the healthcare system. They will listen to what the MSM tells them, with their friends who run our education system, churning out blunt instruments who are smart enough to function in their mindless jobs and consume mindless entertainment without ever questioning their all-knowing, benevolent govt, who only wants to "give everyone their fair share"

rbg81's picture

I've seen this argument before, and it always slays me.  The notion that people would trust the person who fucked it all up to somehow fix things is absurd on the face of it.  The maddening thing is this scenario may just play out.  The Free Shit Army will demand it and they are in the majority now.