Another point he makes is that the safety net does catch people at the very bottom, but traps anyone who climbs out. For instance, at $45,000, they lose Medicaid eligibility; at $65,000, childcare subsidies vanish. “In option terms, the government has sold a call option to the poor, but they’ve rigged the gamma. As you move ‘closer to the money’ (self-sufficiency), the delta collapses. For every dollar of effort you put in, the system confiscates 70 to 100 cents,” he says. “No rational trader would take that trade. Yet we wonder why labor force participation lags. It’s not a mystery. It’s math.”

What? How does the system take 70-100 cents of every dollar of effort put in by low income people? Medicaid and childcare subsidies going away isn’t 70-100% of the income of a household earning 65k.

Obviously losing medicaid or childcare subsidies is a huge blow for anyone, but i don’t understand where he’s pulling 70-100% of the value of someone’s labour from.