CARES Act Focused More on Pork Than Pandemic

 

The CARES (Coronavirus Aid, Relief and Economic Security) Act was an attempt to mitigate the economic damage caused by the government’s response, some of it necessary, to the coronavirus. It started as sort of a bridge loan to help Americans through tough times but became larded with expansions of the welfare state and outrageous special interest pork.

CARES, in overview, is a massive transfer of assets from the private sector to government, maybe the largest ever. Yet it was accomplished with no taxes or other offsets to pay for the truly massive spending. For that, you can thank the rising influence of Modern Monetary Theory (MMT), which holds that sovereign governments can spend without limit because they have the magical ability to print more money when needed. Of course, it’s pure bunkum but spenders like it because it offers a rationale for doing what they want, which is to hand out benefits without raising taxes. The economic harm from our response to the coronavirus will be borne instead by future generations.

So what did we get for putting another $2.2 trillion on that big charge card in the sky? The highest priority should have gone to developing access to testing, treatments, and vaccines for the virus. Economic recovery will proceed apace once the virus is under control.

Yet the federal response has been tepid, relative to the urgency of the situation. FTC and CDC bureaucrats cling to their protocols and business-as-usual mentality.

Instead of adopting a “right-to-try” approach, they balked at using, even on an interim basis, a medication (chloroquine) with an almost unparalleled history of safety over eight decades. Fortunately, the private sector is stepping up to develop effective prevention and therapy, as it has so many times.

The next priority is economic stabilization, providing relief to businesses so that they remain viable and able to provide jobs. As many pointed out, it would have been preferable for this help to come in the form of loans rather than grants because a) there would have been less permanent damage to the federal fisc and b) it would have ensured that recipients needed the aid and weren’t taking it just because it is available, which is happening.

That’s not the way it came out, for the most part. Still, the $349 billion in relief for small businesses and $500 billion for other businesses should be more than enough to get us over the bump.

Further down the priority list is direct grants to individuals, given without regard to work. This part was handled poorly in the Act. Aid was scattershot and wasteful.

Eligibility for unemployment insurance was expanded and the weekly stipend was raised $600 from existing levels. This foolishly transformed the program meant to provide a stopgap into an economic disincentive to work, since many will now suffer a pay cut by resuming work.

Even more wasteful is the stipend for $1,200 plus $500 per child going to individuals making up to $75,000 per year and couples making $150,000. Wow. Whatever happened to a decent respect for taxpayer funds, focusing help to those in need?

Last, there is the pork, which always infests “must-pass” legislation. The Kennedy Center, in the least economically deprived area of the country, bagged $25 million and then laid off staff anyway. But NASA, National Archives, Energy Department, Forest Service, Migrant and Refugee Assistance, Humanities Foundation, Department of Education and many other well-connected agencies, none with any particular nexus to the virus problem, were among the many getting handouts in the bill. Shame on those oinkers who pile on during a national emergency.

Americans deserved more economic relief for less expense. But the greatest failing of the bill was that it didn’t make firm a distinction between temporary and permanent expansions of government power. History teaches us that powers assumed in emergency situations tend to become permanent barnacles on the ship of state. The left has already signaled their intention to make this the new normal.

If they succeed in making government’s response to mitigate a government-caused harm an excuse to permanently expand government’s powers, it could imperil America far more than the coronavirus ever did.

Published in Economics, Healthcare
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  1. Basil Fawlty Member
    Basil Fawlty
    @BasilFawlty

    The CARIES Act. Don’t forget the “I”.

    • #1
  2. J Ro Member
    J Ro
    @JRo

    Whatevah. 

    My spouse and I have been paid almost $1.5 million in the last ten years and we didn’t manage to save or invest any of it. 

    Where is our money? We. need. our. money. now.

    • #2
  3. Darin Johnson Member
    Darin Johnson
    @user_648569

    Is it true that the $2 trillion is going “on the big charge card”?  Is the Fed going to sell bonds, or are they going to print money?  I don’t think we know the answer.  

    MMT enthusiasts insist there is no difference.  But they’re wrong.  As they so often are.  If the Fed simply prints money, then the cost will not be borne by future generations, but by us, right here an now, in the form of inflation.

    • #3
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