Could Losing Obamacare Help Obama?

A blog about business and economics.
April 3 2012 9:44 AM

Striking Down the ACA Is Bad News for Obama, Unless the Law's Critics Are Right

There's a lot of interest out there in the "clever" argument that having the Affordable Care Act struck down could be politically beneficial to the president. I think that's 98 percent nonsense, but people should consider at least one possible scenario.

Many people purport to the belief that the looming implementation of Obamacare has contributed in a material way to slow economic growth. It is for this reason, presumably, that the House GOP caucus titled their anti-Obamacare bill the "Repeal the Job-Killing Health Care Law Act." Now many of the people saying this are just lying and they don't actually think Obamacare is hurting the economy. But it's usually better in politics to assume that people are being sincere. Well if it's true that Obamacare is holding the economy back, then we should expect a Supreme Court repeal of the law to strongly bolster Obama's re-election prospects. The theory, after all, is that even though Obamacare hasn't been implemented yet, firms are looking forward to a higher-tax higher-labor-cost future induced by Obamacare starting in 2014. If the critics are right, then if the Supreme Court decides to veto the law those concerns melt away and we'll see a surge in hiring.

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I don't, personally, think any of that is true. But oftentimes people forget to tie their substantive views to their political forecasts. Nowadays almost all economists believe FDR's NIRA program was counterproductive under the circumstances of the Depression. By killing it, while leaving effective recovery measures like the end of the Gold Standard in place, the Supreme Court of the 1930s did in fact do Roosevelt a favor.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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