A Human Wrecking-Ball In The White House

April 30, 2021 Francis Menton @ Manhattan Contrarian

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.

But anyway, now that we’re in the Biden era, we’re not so much concerned any more with little problems like poverty. Now that all limits are removed, we can pass out money to everybody indiscriminately (child tax credits for all!), or to people predominantly in the upper half of the income distribution (free college!) or even the upper ten percent (electric car charging stations!).

Our metrics for measuring the effects of all this spending are wholly inadequate to the task. As readers here know, government spending is immediately counted into income and GDP figures, with the destructive effects only showing up later, sometimes many years later. How much of the current surge in reported economic activity is the consequence of the illusionary inclusion of the blowout spending as supposedly representing economic growth? It’s impossible to tell. Never forget that in Venezuela they were using similar measuring conventions to declare an “economic miracle” many years after the economic catastrophe had become clear to everyone on the ground.

Roger Kimball calls the Biden program “MAPA” — Make America Poor Again. I couldn’t say it better. Here is Early’s list of federal “need based” programs:

At least partially in CBO estimates: 

1. Supplemental Security Income
2. Earned Income Tax Credit (refundable component)
3. SNAP (food stamps)
4. Medicaid
5. CHIP
6. Temporary Assistance for Needy Families (TANF) cash aid
7. School Breakfast Program (free/reduced price components)

Not in CBO estimates:

1. Public Housing
2. Section 8 Housing Choice Vouchers
3. Low-Income Home Energy Assistance Program (LIHEAP)
4. Family Planning
5. Consolidated Health Centers
6. Transitional Cash and Medical Services for Refugees
7. Voluntary Medicare Prescription Drug Benefit—Low-Income Subsidy 15. Ryan White HIV/AIDS Program
8. Breast/Cervical Cancer Early Detection
9. Maternal and Child Health Block Grant
10. Indian Health Service
11. Additional Child Tax Credit
12. National School Lunch Program (free/reduced price components)
13. Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
14. Child and Adult Care Food Program (lower-income components)
15. Summer Food Service Program
16. Commodity Supplemental
17. Food Program Nutrition Assistance for Puerto Rico
18. The Emergency Food Assistance Program (TEFAP)
19. Nutrition Program for the Elderly
20. Indian Education
21. Adult Basic Education Grants to States
22. Federal Supplemental Educational Opportunity Grant
23. Education for the Disadvantaged—Grants to Local Educational Agencies (Title I-A) 32. Title I Migrant Education Program
24. Higher Education—Institutional Aid and Developing Institutions
25. Federal Work-Study
26.  Federal TRIO Programs
27. Federal Pell Grants
28. Education for Homeless Children and Youth
29. 21st Century Community Learning Centers
30. Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR-UP) 40. Reading First and Early Reading First
31. Rural Education Achievement Program
32. Mathematics and Science Partnerships
33. Improving Teacher Quality State Grants
34. Academic Competitiveness and Smart Grant Program
35. Single-Family Rural Housing Loans
36. Rural Rental Assistance Program
37. Water and Waste Disposal for Rural Communities
38. Public Works and Economic Development
39. Supportive Housing for the Elderly
40. Supportive Housing for Persons with Disabilities
41. Section 8 Project-Based Rental Assistance
42. Community Development Block Grants
43. Homeless Assistance Grants
44. Home Investment Partnerships Program (HOME)
45. Housing Opportunities for Persons with AIDS (HOPWA)
46. Indian Housing Block Grants
47. Neighborhood Stabilization Program
48. Grants to States for Low-Income Housing in Lieu of Low-Income Housing Credit Allocations
49. Tax Credit Assistance Program
50. Indian Human Services
51. Older Americans Act Grants for Supportive Services and Senior Centers
52. Older Americans Act Family Caregiver Program
53. TANF social services
54. Child Support Enforcement
55. Community Services Block Grant
56. Child Care and Development Fund
57. Head Start HHS
58. Developmental Disabilities Support and Advocacy Grants
59. Foster Care
60. Adoption Assistance
61. Social Services Block Grant
62. Chafee Foster Care Independence Program
63. Emergency Food and Shelter Program
64. Legal Services Corporation
65. Supplemental Nutrition Assistance Program (SNAP) (employment and training component)
66. Community Service Employment for Older Americans
67. Workforce Investment Act (WIA) Adult Activities
68. Workforce Investment Act (WIA) Youth Activities
69. Social Services and Targeted Assistance for Refugees
70. Temporary Assistance for Needy Families (TANF) employment and training
71. Foster Grandparents
72. Job Corps
73. Weatherization Assistance Program