Op-Ed: What It Cost the Government to 'Save' $1 in Jobs Is Almost Criminal
We have witnessed a string of catastrophic government blunders in the last several years.
A partial listing of these blunders by our elected leaders includes:
- The disastrous withdrawal from Afghanistan, intervention in Ukraine with no strategy to win, the introduction of wokeness into the military creating a recruitment crisis, and failure to stand up for Hong Kong.
- Double-digit inflation caused by poor fiscal and monetary policy, and failure to stabilize Social Security and Medicare.
- The baby formula crisis and an ongoing chip shortage affecting much of America’s manufacturing capability.
- Deliberately creating a disaster at the border with the importation of millions of illegal migrants, and ignoring the rising death toll from fentanyl.
- Pushing “green” energy before it is proven and phasing out energy that is proven before its time.
- Defunding the police and creating a crime wave, releasing violent criminals onto the streets in many cities and failing to enforce the laws fairly without discrimination.
- Failing to educate our children with basic skills while propagandizing them with racism and sexual perversion, and responding to legitimate parent complaints by labeling them as domestic terrorists.
Whew! And this is just a partial list.
The big one was, of course, the response to COVID. From the decision to lock down came many of our economic woes.
The state and federal governments severely damaged civil liberties, failed to “flatten the curve” in a timeframe even close to that proposed, ignored normal protocols for the safety and efficacy of vaccines, completely overstated the effectiveness of both vaccines and masks, failed to diligently pursue treatments, distorted the labor markets and the economy in general, and failed to investigate the origins of the virus.
The Economist magazine last week featured an article that stated that the educational damage was far greater and wider than ever expected. Really? You shut the schools down and are surprised by the damage?
One of the “bipartisan” measures touted by both parties was the Paycheck Protection Program.
You might remember that these were non-collateralized loans, with no recourse, extended to small businesses (with fewer than 500 employees) to offset the effect of the lockdowns. In a sense, it was justified because it was the government that was putting companies out of business and creating huge layoffs.
For a government program, it was developed and executed quite rapidly, barely three weeks after the emergency was declared for the Wuhan virus.
Initiated under President Donald Trump in March 2020, most of the “loans” were forgiven by President Joe Biden by June 2022.
This and other handout programs drastically increased the money in circulation. This is largely responsible for the inflation crisis and acculturating the public to expect direct payments from the government.
Moreover, the program itself was grotesquely inefficient. A new study has found that while it did save some jobs (jobs that would not have needed saving if the government had not adopted lockdown measures), it did so with great waste.
The Federal Reserve Bank of St. Louis found that it cost between $169,000 to $258,000 to save a job that averages $58,200. The authors of the study concluded that it cost taxpayers about $4 for every $1 in “saved” jobs.
Besides this miserable outcome, the study found that 72 percent of PPP funds went to households in the top 20 percent of income. In short, it was a massive handout to the rich and affluent. This simply exacerbated the problem of income inequality.
“Well,” you could say, “this is what happens in emergencies.” But it was the government that created the emergency! Further, it appears that government-funded programs gave birth to the virus itself.
COVID deaths were concentrated among the very elderly and those with co-morbidities, often two or more. There was never any real threat to the great majority of workers or small businesses.
Even if there was a threat to the general population, you have to wonder if government SBA loans and bolstering the use of unemployment insurance would not have been a less wasteful way to handle the problem. Spending $4 to save $1 makes little sense.
Moreover, it has been estimated that some 60 percent of businesses that were closed during lockdown are not coming back.
The Paycheck Protection Program was a monumental waste and failed in the end to save a huge swath of small businesses.
This is the downside to the “never let a crisis go to waste” mentality of those of both political parties in Washington, D.C. Often programs are ill-conceived, wasteful, set terrible precedents and are difficult to repeal.
About the only good thing that can be said about this program is that it ended in fairly short order.
This raises a very interesting macro question: Given the string of errors made by our government leaders and corporate elites, why does a large segment of the population still insist that government programs, using compulsion and public money, are the way to solve complex problems?
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