Runaway Spending and Regulation Call for an Abuse-of-Crisis Prevention Act

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The escalation of spending and regulation in the face of economic shock—by means of “resets,” “New New Deals,” “new social contracts,” and “Build Back Better” central planning schemes—underscores the urgency of an “Abuse-of-Crisis Prevention Act.”

In an advanced progressive regime, spending is regulation. Such government displaces voluntary human interaction and institutions and undermines the resilience and well-being these otherwise provide. The debilitating interventions being undertaken now have been enabled by Republicans who long ago make peace with dependency on the state.

In the wake of several COVID-related interventions in 2020 and President Joe Biden’s 2021 American Rescue Plan, packages now under deliberation, the American Jobs Plan and the forthcoming American Families Plan, have largely dispensed with the pandemic justification. This is in keeping with pronouncements early in 2020 that made clear that the contagion was a convenient pretext for a slate of other goals.

The actual crisis now is that these interventions are so invasive and destructive of limited government as to render it impossible for future generations, who will be saddled with our debt, to weather their own crises. This state of affairs will be exploited, again, for further appeals on behalf of still-larger government.

In a recent article, some needed steps on course correction, far from exhaustive, were detailed.

First: Emergency declarations require reform. These are a core function of a government when constitutionally circumscribed, but in the administrative state context they can become highly regulatory and destructive of property rights and constitutional government. Eviction moratoria are one example; landlords are not morally beneath renters.

Second: Household resilience is necessary. This requires allowing for the intergenerational set-aside of massive months’ worth of funds that convert to retirement upon old age—no funding of liberal pet programs until the home front is taken care of. This approach means massive and explicit transfers of wealth from a systematically forced-to-shrink federal government back to the individuals who created that wealth in the first place, and who now get to keep it. Such sweeping changes can also foster the ability to help one another. But most concretely, the mission here is to confront and stop the “new social contract” escapades, such as the Universal Basic Income (UBI), which I have charitably deemed the “plural of apocalypse.” 

Third: Internal Revenue Service changes to retained earnings limits for cash reserves for businesses and liberalization in insurance products that replace emergency declarations are needed. Businesses flush with cash are better able to withstand economic shocks.

Fourth: Sweeping changes to hundreds of billions in annual block grants to states are necessary. Such programs have grown from 100 under President Lyndon Johnson to over 1,100 now, with spending on them topping $750 billion in 2019, according to the Congressional Research Service. A major battle in the COVID response was precisely that of state bailouts. These trillions should have remained in states in the first place. There are other moves with respect to restoration of federalism that are necessary too. Such reforms would localize and rationalize the emergency declaration issues noted above, parceling out what an appropriate and limited federal role can be when states properly carry the bulk of the responsibility.

Fifth: There is no end to the number of “national conversations” the left says it wants to have. Be that as it may, addressing qualified immunity for police officers who abuse power is one such concern. Given that the idea is in circulation at an opportune time, one discussion item to add to the list is how to penalize politicians and punish policy makers for exploiting crises. They wield vastly more power over the population than an officer of the law. The time has come, truly, to “Let Crises Go to Waste” as the inverse of the cliché would go.

These are merely some options to be prepared for and to respond to crises in ways that expand liberty and growth rather than exploit fear. The best American Rescue Plan is an Abuse-of-Crisis Prevention Act. Trillions of dollars being spent in interventionist programs that now have largely dispensed altogether with the COVID rationale altogether. An actual “reset” would pull back the ambitions of government.