(Originally posted on Mises.org)
Since the 1800s, surly Americans have derided politicians for spending tax dollars “like drunken sailors.” Until recently, that was considered a grave character fault. But Joe Biden’s American Rescue Plan Act shows that inebriated spending is now the path to national salvation.
It was a common saying in America in the 1930s that “we cannot squander our way to prosperity.” But that was before the latest “best and brightest” crop took the helm of the federal government.
The rescue act is based on blind faith in government spending—the revival of the “Magic Bean School of Political Economy.” When he signed the bill on March 12, Biden declared, “We have to spend this money to make sure we have economic growth, unrelated to how much it’s going to help people.” The act’s $1.9 trillion price tag is proof of its beneficence. Biden boasted that he would be sending federal “stimulus” checks to more than 100 million Americans in the following ten days. The White House called the bill “the most progressive piece of legislation in history.”
The biggest fear in Washington is that federal agencies will not be able to throw tax dollars at citizens, businesses, and local and state governments quickly enough. The Washington Post frets that “the sheer volume of new programs threatens to swamp federal agencies.” This is the sixth federal COVID bailout since last spring, and “a slew of other efforts to help struggling businesses … have been trapped in the federal bureaucracy.”
The purpose of this rescue act is to rescue faith in Big Government. In his televised address, Biden declared that in order to “beat this virus,” Americans must “put trust and faith in our government to fulfill its most important function, which is protecting the American people…. We need to remember the government isn’t some foreign force in a distant capital. No, it’s us. All of us. We, the people.” At the time of Biden’s speech, the U.S. Capitol was surrounded by high fences topped with razor wire. Thousands of National Guard troops prowled the grounds of the Capitol and elsewhere in the District of Columbia to deter any unpleasantness from uppity citizens. Luckily, most of the Washington media continued to vouch that the political class was dutifully serving Americans behind closed doors.
Biden promised “fastidious oversight to make sure there’s no waste or fraud” in the multi-trillion-dollar bonanza. But politicians define “waste” differently than taxpayers define the term. Any handout that produces political gratitude is a fruitful investment according to Washington scoring. Sen. Ron Wyden (D-Ore.) promised, “We’re going to be watchdogging this every single step of the way.” However, the attendance by senators at congressional oversight hearings is on par with attendance at baseball games during COVID lockdowns. Most members of Congress will pay little attention to the details of the law as long as their constituents get deluged with free money.
The Biden bill includes barrels of new handouts that Congress rushed into law without careful examination. When federal benefits exceed what someone could earn on the job, they can become a penalty fee on work. University of Chicago economist Casey Mulligan estimated that the extra unemployment payments and other benefits in the Biden bill could result in employing 8 million fewer Americans later this year. But collateral damage doesn’t matter as long as politicians get campaign contributions and applause for programs that wreak economic havoc with perverse incentives.
The Biden administration is bringing the same solution to America that previously failed in Afghanistan. After Barack Obama decided to “surge” U.S. troops into Afghanistan, the Christian Science Monitor noted in 2010, the U.S. Agency for International Development (USAID) “created an atmosphere of frantic urgency about the ‘burn rate’—a measure of how quickly money is spent. Emphasis gets put on spending fast to make room for the next batch from Congress.” One Kabul-based analyst employee lamented, “As long as you spend money and you can provide a paper trail, that’s a job well done. It’s a perverse system.” The Washington Post noted in 2019, “Many aid workers blamed Congress for what they saw as a mindless rush to spend.” John Sopko, the Special Inspector General for Afghanistan Reconstruction (SIGAR), lambasted a system where it seemed that “only those who can shove the money out the door or meet the required ‘burn rate’ are to be promoted and rewarded.” The “burn rate” produced endless absurdities in Afghanistan, including collapsing schools, impassable roads, failed electrification projects, and a nonexistent health clinic.
In his televised address on March 11, Biden promised, “I’m using every power I have as the president of the United States to put us on a war footing.” But who was Biden going to war against?
Alas, Americans’ rights and liberties could be in the cross hairs of the latest attempt by the U.S. government to buy submission. Shortly after the United States invaded Iraq in 2003, pallets stacked high with newly printed $100 bills were flown into Baghdad. U.S. military officers handed bundles of cash to local residents to buy influence and undermine resistance to the U.S. occupation. The “Money as a Weapon System” (MAAWS) program scattered $10 billion with little or no oversight. The handouts were valuable for “demonstrating positive intent or goodwill” and helped “gain access or influence,” according to a 2012 Pentagon analysis. Such payments came in especially handy after U.S. troops inadvertently killed children or sheep. MAAWS subsidized Bush administration boasting about Iraq and, later on, Obama administration boasting about Afghanistan.
Presidents and members of Congress are not formally carrying out a counterinsurgency campaign against the American people. But politicians of both parties have long relied on MAAWS to buy votes or buttress their power. Last year, Donald Trump made sure that the federal COVID checks Americans received had his signature. Democrats took control of the U.S. Senate, thanks to Biden’s promise that voters would receive $2,000 federal checks if Democrats won the January runoff elections in Georgia.
Can politicians convert the big checks they send voters into a blank check for additional power for themselves? Biden recently told congressional Democrats that “Americans are in lockstep on each major element” of his rescue act. Concerned observers are still waiting for Biden to reveal where he will order Americans to march.
As the feds launched the deluge of new handouts, Biden declared, “We have to continue to build confidence in the American people that their government can function for them and deliver.” But neither Biden nor other Democratic politicians nor their media allies will admit that the COVID “relief” payments are a response to the horrendous damage previously inflicted by politicians.
After the COVID-19 pandemic began, politicians tightened tourniquets that were supposed to vanquish the virus by cutting off the economy’s blood supply. Governors in state after state effectively placed hundreds of millions of citizens under house arrest—dictates that former Attorney General Bill Barr aptly compared to “the greatest intrusion on civil liberties” since the end of slavery. New York’s governor, Andrew Cuomo, set the standard when he effectively declared that he was entitled to inflict any burden on his state’s residents to “save just one life.”
But heavy-handed government decrees were more effective at wrecking lives than at vanquishing a virus. More than 10 million jobs were destroyed. Almost 40 percent of households earning less than $40,000 per year have someone who lost his job in recent months, according to the Federal Reserve. Prohibiting people from living normal lives resulted in surging rates of suicide, drug abuse, and depression. The Disaster Distress Helpline, a federal crisis hotline, received almost 900 percent more phone calls compared with the prior year. A California health organization recently estimated that seventy-five thousand Americans could die from “despair” as a result of the pandemic, unemployment, and government restrictions. Maybe the shutdown champions will solve that problem by making antidepressants mandatory for all citizens?
One of the greatest continuing disruptions of the pandemic is the continued shutdown of government schools. During his presidential campaign, Biden promised to deluge schools with enough federal aid that they could reopen safely within one hundred days. That hundred days came and went, and many of the nation’s largest school systems remain padlocked despite evidence that they could safely reopen. Teachers’ unions feel that their members are entitled to full pay and zero risk, and the Biden administration is kowtowing to one of its largest political supporters. While many parents who depended on government schools are seeing their kids fall far behind academically, many private schools have reopened with little or no problem. The exodus from government schools is one of the bright spots from the pandemic.
Addicting citizens to government handouts could be the easiest way to breed mass docility and enable politicians to stretch their power. The bigger the government becomes, the more votes it can buy. At some point, soaring government spending and the taxation to finance handouts becomes a Damocles sword over the entire political system. As economist Warren Nutter warned, “The more that government takes, the less likely that democracy will survive.”
Politicians cannot undermine self-reliance without subverting self-government. Thomas Jefferson warned, “Dependence … prepares fit tools for the designs of [political] ambition.” Plutarch observed of the dying days of the Roman Republic: “The people were at that time extremely corrupted by the gifts of those who sought office, and most made a constant trade of selling their voices.” Montesquieu wrote: “It is impossible to make great largesses to the people without great extortion: and to compass this, the state must be subverted. The greater the advantages they seem to derive from their liberty [of voting], the nearer they approach towards the critical moment of losing it.” As economist Friedrich Hayek noted, “The conception that government should be guided by majority opinion makes sense only if that opinion is independent of government.”
Anything that encourages people to view politicians as saviors imperils freedom. The more people there are who depend on Washington, the more difficult it becomes to leash politicians. But the profusion of handouts will enable politicians to yank in the reins on average citizens. The Supreme Court ruled in 1942, “It is hardly lack of due process for the government to regulate that which it subsidizes.” Government controls have followed a short step behind the subsidies; as a result, more and more activities in our society and economy are now dependent on political approval. Subsidies inherently represent a transfer of sovereignty and power from private citizens to politicians and bureaucrats.
Biden may be confident that deluging Americans with government checks can put the federal government back on a pedestal. But as a top U.S. government official lamented regarding Afghanistan, “We had no legitimacy if we weren’t flooding the area with cash.” At some point, the federal government’s ability to carpet bomb citizens with free money will fizzle out. In the meantime, the biggest mistake Americans could make is to permit politicians to absolve themselves by giving away more of other people’s money.
This article was originally published in the June 2021 edition of Future of Freedom.Author:
James Bovard is the author of ten books, including 2012’s Public Policy Hooligan, and 2006’s Attention Deficit Democracy. He has written for the New York Times, Wall Street Journal, Playboy, Washington Post, and many other publications.