Monday, February 10, 2014

CBO and Resource Dependence

She said that living with me
Is bringing her down, yeah
For she would never be free
When I was around
--The Beatles

Professor John Taylor wonders why the CBO waited so long to report its estimated negative effects of Obamacare on motivation to work. After all, it is well known that large welfare programs provide disincentives for work. Higher marginal tax rates associated with leaving welfare for productive work is one important mechanism for keeping people unemployed.

Prof Taylor's question about the CBO is a rhetorical one, of course. The situation reflects a classic application of resource dependence theory (Pfeffer & Salancik, 1978). Any government agency, even one that claims to be 'non-partisan' such as the CBO, depends on the State (whether controlled by Democrats or Republicans) for resources.

This suggests that not only has the CBO's estimate of 2 million disincented workers by 2020 been delivered late, but it is also probably too low.

It is unlikely that CBO will bite feeding hands.


Pfeffer, J. & Salancik, G.R. 1978. The external control of organizations: A resource dependence perspective. New York: Harper & Row.


dgeorge12358 said...

Dependency is death to initiative, to risk-taking and opportunity. It's time to stop the spread of government dependency and fight it like the poison it is.
~Mitt Romney

dgeorge12358 said...

Since President Lyndon Johnson declared war on poverty, the nation has spent about $18 trillion at the federal, state and local levels of government on programs justified by the "need" to deal with some aspect of poverty.

Today's total of $18 trillion spent on poverty means you could purchase everything produced in our country each year and then some.
~Walter Williams