Big Government Exacerbates Its Exacerbations - TribPapers
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Big Government Exacerbates Its Exacerbations

John Allison.

Asheville – Two decades ago, free-market economists warned that Americans’ fiscal relationship with their government was not sustainable. They were dismissed as schizophrenic. The punchbowl was full, so there was no need to stop drinking. Now, price systems are way out of alignment, and the government is doubling down with “cures” that only exacerbate the widening of the gulf between supply and demand.

One illustration of open-loop, albeit emotionally charged, price theory promulgated by the current generation of anarchists driving public policy surfaced in press coverage down east. Restaurateurs, unable to earn enough to pay staff living wages, but wanting to keep good workers so they could stay in business, started replacing tips with mandatory fees of 20% or more. One might expect activist groups that list employers paying living wages to be pleased. Instead, they concluded the restaurateurs did not qualify for listing because, according to them, it was the customers, not the employers, who were paying the supplements. 

The activists seemed to be saying those who know how to make money don’t know how to manage it, and vice versa. The trouble with that line is that those who want to tell people how to spend their money are largely in denial about how the earners came into possession of their resources. How do these youth suppose restaurants make their money? Were they telling restaurateurs to get a second job to fund overhead for the first job and use earnings from the first to fund the second? More likely, they were parroting rhetoric bent on destroying the economy. The economy keeps Americans free from a dominance-and-submission form of government; by requiring restaurateurs to expend their personal savings accounts and then turn to local, state, or federal subsidies to stay in business.

If nothing else, COVID-19 was a force increasing the concentration of government in the already regrettably mixed economy. As businesses were forced shut and people were burning through their savings, some private charities did spring up, but they paled in comparison to the massive dollars promised by government COVID-19 relief. While people said the government owed them for forcing the shutdown, they also complained about a system that was overly complex, way late in making payments and riddled with an opportunity to pay windfalls to favorite sons. For example, the federal Shuttered Venue Operators Grant program, authorized in December, as of June 30 had administered $1 billion of $16 billion allocated.

On a larger scale is the game of corporate welfare. An Adam Smith economist would view business as nothing more than trading value for value, a win-win where people unload their surplus on willing buyers to get the things they need and want. Thus, in an unregulated (free) market, to stay in business, corporations would have to keep selling customers things they want and things that actually work. If the public turns to the competition because a company has excessive overhead, is manufacturing obsolete wares, has too many manufacturer’s defects, or can’t fill its orders on time, maybe it’s time for that company to restructure, retool or go out of business.

Instead, companies turn to the government for money they can’t earn. In many cases, though, corporate welfare is solicited simply because megamillion-multinationals don’t mind the money. Either way, instead of searching for better ways to serve customers and earn more income, corporations receiving government subsidies can happily continue paying executives well in the blissful production of junk. Through the years, these opportunities have become more normalized, and manufacturing has practically left the country. Meanwhile, leaders of both political parties praise the programs for creating high-paying jobs, off the taxes paid by persons earning less, incidentally.

Two other federal programs fiscal conservatives and advocates of limited government typically defend as owed to them are Social Security and Medicare. Ideally, the government should not be forcing people to sock money away in these weak programs; especially, when they could be receiving higher returns on their investment almost anywhere else. Worse, when updating the public on government mismanagement last year, the Congressional Budget Office estimated the trust fund for Social Security will be depleted by 2031. The fund that pays benefits to persons with disabilities will zero out by 2026 and the fund for Medicare hospital insurance will dry up by 2024.

A more immediate government-spawned plight already affecting people just trying to work hard and be good citizens is the housing crisis. Back in 2017, the Federal Government forced banks to participate in the Troubled Asset Relief Program (TARP) bailouts that were necessitated by the subprime lending crisis causing the housing bubble to burst. The inducement of banks to grant and borrowers to enter into high-risk mortgages were both ill-advised strategies pushed by the government under the assumption that giving a man a fish would keep him on the hook for government feeding every day thereafter. Still, after the government bailed out its favorite banks and forced others with sounder policies to fail, activists turned quickly around to demand that government once again force unqualified families not only into houses but houses that wouldn’t stigmatize them as poor.

To fund housing subsidies, the City of Asheville is raising taxes. The rich have lawyers and accountants to identify loopholes, so the middle class will pay again, all the while making too much for subsidized housing and too little to support a thriving, mid-range housing market.

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