We at The Resurgent have the
best readers. No readers have ever been as good as ours. It’s amazing. You guys
y’all are a great bunch. A few days ago, I got a thought-provoking email from a
reader who asked what a conservative response to the current crisis would be.
crux of the question from the reader, who described himself as a “former
conservative,” was, “For the people in my neighborhood who depend on the
subway, people who work minimum wage jobs, people who barely make it month to
month, do conservatives believe that government should not help them? What are
your thoughts? We always hear about a desire to cut taxes, cut entitlements, cut
food stamps, cut school lunches from the right. Does this crisis give you any
pause to reconsider any aspect of your beliefs?”
While opinions are going to vary, I think that most conservatives would agree that some sort of government response to both the pandemic and the resulting economic crisis is appropriate. Even among conservatives, there is widespread support for a social safety net. If you don’t believe me, just suggest reforming Social Security or Medicare to a group of Republicans.
The Constitution also supports a government response to the pandemic. The general welfare clause may be one of the most abused parts of the Constitution, but limiting the reach of the pandemic would literally be promoting the general health and welfare of the country.
While I believe in individual charity, charities that help the poor will be overwhelmed by a pandemic that affects nearly every industry. Donations will fall because people will be concerned about possible layoffs. At any rate, how many individual donations would be required to prop up the airline industry alone?
were not unknown to the Framers either. There were a number of quarantines in early American history to combat
epidemics of smallpox and yellow fever. These quarantines were usually
conducted by state and local authorities since they were local epidemics, but,
with the threat of a nationwide health crisis, the federal power to regulate
interstate commerce implies the power to limit that commerce in an emergency as
as Erick Erickson wrote, not all government action has to be
taken at the federal level. Similar to the quarantines of the past, states are
taking action to contain the Coronavirus that are more restrictive than those
of the federal government.
question of containment actions to slow the spread of the virus is definitely
both constitutional and a good idea, but that leads to a second issue that was
brought up by the reader. Containment and quarantines hurt businesses and
damage the economy. That pain trickles down to workers, many of whom are living
there are two ways to get people to limit social and business contact. One is
to declare a quarantine and enforce it at the point of a gun. The second is to
give people an incentive to maintain their distance. I believe that the second
option would be more effective and less panic-inducing.
many people will need some sort of assistance to stay home for the two weeks of
a Coronavirus quarantine. If you live paycheck-to-paycheck, then you probably
don’t have two weeks’ worth of food stockpiled. You’re probably also worried
about making the next mortgage or rent payment.
virus will impact most of the country negatively. Travel businesses such as
airlines, cruise ships, and hotels will see their business drop sharply. Many
movie theaters are completely closed and few want to eat in restaurants or
bars. In some cases, local governments are ordering those establishments
closed. Insurance companies face staggering losses on both life and health
claims. The only places that seem to be doing a brisk business these days are
grocery stores and pharmacies.
China released economic data for the first part of the year this week. The financials show their industrial output and investment going over a cliff. There’s a good chance that the US will see the bottom abruptly drop out of its economy as well.
some companies, the marketplace may have already provided a solution. Some
commercial insurance policies include business interruption coverage that could help to
recoup some losses. For others, some sort of government assistance is going to
be in the best interests of the country as it fights off a dangerous virus.
question is what sort of assistance. As Erick recently pointed out, the current virus relief bill
mandates paid leave for small businesses. The problem is that this is an
unfunded mandate. If businesses that are closed are forced to pay employees who
aren’t working, those companies will quickly go out of business. It won’t help
the economy if closed businesses never reopen.
problem is compounded by the American system of linking health insurance to
employment. If businesses go under or lay off employees, those people can lose
their insurance just when they need it most.
the current bill is a bad one for that and other reasons, the question remains
what a good reform bill would look like. A couple of ideas include expanding
unemployment insurance to cover quarantines and work stoppages. This could be
funded by block grants to the states since each state manages its own
unemployment insurance program.
possibility is to provide Small Business Administration loans to help companies
make payroll through the lean times ahead. The slowdown from the virus might
only last a few weeks but many small businesses don’t have the cash reserves to
stay afloat that long.
Senators Mitt Romney (R-Utah) and Tom Cotton (R-Ark.) have
endorsed the idea of monthly
payments of $1,000 to individual Americans as part of a relief package.
While the idea has been ridiculed in some quarters, it makes as much sense than
the Administration’s idea of a payroll tax cut for businesses that may be laying
off employees or closing their doors. The idea is similar to the universal
basic income payment proposed by Democratic candidate Andrew Yang but would
only be in place for the duration of the emergency. The payments, which are
reminiscent of George
W. Bush’s $600 per person stimulus in 2007, would allow Americans to buy
food and other necessities, as well as paying rent, without breaking quarantine
to go to work or exhausting their savings. The Trump Administration seems to be embracing
this idea as well.
Finally, it would make sense for the government to extend Medicaid
to Coronavirus patients on a temporary basis. The cost for this should be
comparatively low. Most seniors are already covered by Medicare and working
adults and their families are usually covered by employer health plans. The gap
would be from people who are currently uninsured or who lose their health
coverage due to layoffs. An alternative plan would be for the government to
subsidize COBRA benefits during the crisis.
Since there is no treatment for Coronavirus and the majority of cases are light, health costs should be low for most people. It is the cases that require hospital stays and intensive care that are costly. Nevertheless, having people with mild symptoms tested and in the system will help track the disease.
I am not normally a government interventionist, these are not normal times.
Temporary, targeted relief would be in the best interests of the country as a
whole, especially if that relief could be managed at the state and local levels
rather than being directed from Washington.
One of the most difficult aspects of the economic response is that we were already $23 trillion in debt with a deficit approaching $1 trillion annually before the current crisis. In trying to stave off an economic collapse caused by the Coronavirus, we will be pushing ourselves closer to a debt crisis. One of the lessons of the pandemic should be that emergency funds are an important part of planning for both individuals and businesses, as well as the nation as a whole.
The bottom line is that the Coronavirus represents a national
public health emergency. A real one, unlike the contrived national emergency on
the southern border last year. By definition, emergency measures are
appropriate in an emergency. By definition, emergency actions are also temporary.
When the crisis is over, the federal government should tighten
its belt and look at serious budgetary reform. We aren’t $23 trillion in debt
because of emergency spending but because we spend far too much when times are
good. With a majority
of the federal budget going to entitlement programs, entitlement reform should
be a priority if we want to avoid a financial crisis that comes when the world
moves away from the dollar and we can no longer finance our extravagant lifestyle