Maybe you didn’t believe me earlier this month when I issued a warning that the U.S. was “getting ready to go full Venezuela” on economic policy. After Biden’s speech a couple of nights ago, are you starting to get the picture?
All constraints are now lifted. All limits no longer apply. The federal government is now fully unleashed to solve all human problems and bring about perfect fairness and equity in human affairs. And to do so immediately if not sooner. All through the magic of a few trillion additional dollars (per year!) of federal spending. And while we’re at it, we’ll also solve the “climate emergency.” That will cost just another few incremental annual trillion. In the context of our new superpowers, that’s a rounding error.
The flood of proposed new programs and spending is so enormous as to make critiques of any individual items completely pointless. Is there a single one of these proposals that makes sense, or that actually might enhance the well-being of the American people? If so it’s such a small portion as to be insignificant.
Instead, I’ll address what I consider to be the elephant in the room, the obvious thing that somehow never gets mentioned. That is, why haven’t the vast numbers of already-existing federal social service programs and spending already succeeded in solving the problems they were created and funded to solve?
At the end of this post I have included a list of some 83 categories of federal “need based” spending programs. The list comes from a 2018 report by John Early written for the Cato Institute, but he took it from a document put together by the Congressional Research Service in 2013. In other words, I’m sure that there are plenty more of these things since this list was compiled. Note also that this is far, far, far from a complete list of federal income and in-kind distribution and benefit programs, since it specifically only includes those that are “need based.” Thus the list doesn’t even include the single largest federal income distribution program of all, which is Social Security. Aficionados of this subject will also recognize that large numbers of food and nutrition programs and job training programs are also missing, undoubtedly because they are not “need based.” (In this post back in 2014 I found a study that identified some 47 federal job training programs alone.).
Note that the Early list is broken down into two categories, those programs that figure “at least partially in CBO estimates” and those that are “not in CBO estimates.” The “estimates” referred to are estimates of income. The list of what CBO includes in “income” for its purposes differs from what is included by Census. The Census numbers, rather than those of CBO, are the source of things like our statistics on “poverty” and “income inequality.” Unlike CBO, Census does not include 5 of those first 7 categories in “income” in its measures. The excluded 5 are the EITC, SNAP, Medicaid, CHIP and the School Breakfast Program. If you wonder how the spending of a trillion dollars plus per year never seems to improve poverty or income inequality, this is how. The spending is simply excluded when the things we are trying to improve are measured.