• Josh Lewis

How Should Conservatives React to a $2.2 Trillion Relief Bill?

Updated: Apr 4

All told, you are currently indebted over $400,000 to the government. And your liability has only increased now that Congress added another $2,200,000,000,000.00 to the national debt.

As news came last week that the Senate passed 96 to 0—the remaining four Senators were not present—a $2.2 trillion bill to provide economic relief for those impacted by the COVID-19 pandemic, one could be forgiven for questioning the fiscal feasibility of increasing—ahemyour financial burden by such an eye-popping amount.

Historically, the Republican party has positioned itself as stalwart deficit hawks, always casting a wary eye against runaway spending and ever-mounting debt. In reality, the GOP has been better in rhetoric on the national debt and spending than in actually doing anything about it. Ever since the dawn of Trump—whose administration is poised to add another $8,300,000,000,000.00 to the national debt—the GOP has even dropped much of the rhetoric. Now both parties treat the issue as that thing we don’t actually take seriously.

And why should they? The voters certainly don’t seem to be taking the matter seriously. While Republicans elected one of the very few candidates in 2016 to promise not to touch entitlement spending—which makes up nearly 70% of the Federal budget and continues to grow—the Democratic candidates of 2020 were consistently one-upping one another in who could offer the biggest chicken-in-every-pot cash giveaways.

But the fact that so few seem bothered by the national debt doesn’t change the reality of the matter: sooner or later, the bills must be paid. And, while it is possible we may find a way to set our fiscal house in order with minimal wailing and gnashing of teeth, it is also possible the long term impacts will be catastrophic; even civilization-ending.

What might conservatism tell us about the predicament we find ourselves in? Was it right for the government to spend so much money trying to combat the effects of the coronavirus? Would it have been better to simply do nothing and let the free market sort things out? Doesn’t governmental interference in the market always lead to unintended consequences that are often worse than the very problems the interference is attempting to solve?

A Three-Part Test for Determining Whether Government Should Get Involved

My friend Avi Woolf wrote an excellent piece for The Bulwark last year in which he argued that when the question should the government help? is asked, “Progressives will always say ‘yes.’ Libertarians will always say ‘no.’” What then, does the conservative say? According to Avi, the answer is almost always “It depends.”

The conservative does not view government as the answer to every problem—far from it!—but they also acknowledge that the government is uniquely suited to provide for certain needs or perform certain tasks that individuals or other organizations often cannot do on their own. Governments are very good at single-purpose endeavors that require massive amounts of resources and manpower, whereas the free market is ideal for meeting multi-purpose needs and desires. The government can allocate resources to build houses, but the free market can provide housing to meet the multitude of unique needs, circumstances, personal preferences, and affordability of the population at large.

The most obvious example where government is needed is fighting a war. Which is why the U.S. military is phenomenal at toppling enemy governments (a single-purpose endeavor) but not at nation building with its complex web of feuding tribal grievances and distribution of key resources. Sometimes the challenges we face are not so easily divided into things the government is ideally suited to do and things they are not and truth is somewhere in the murky middle.

To aid us in the decision-making process, Avi offers a three-part test to determine if a conservative would be inclined to say that the government should be involved in the solution:

  1. First, there’s the matter of prescription. Conservatives have a bias towards the tried and true methods of doing things. Before insisting the government should be involved, we ought first to examine all the reasons the government has not been involved up until this point. Unless there’s compelling reasons to believe an innovative change would be better than leaving things alone, the conservative opts for the latter. For a deep-dive into how prescription guides the conservative, check out my blog series on the matter.

  2. “The next test which your idea must meet is often called subsidiarity or federalism,” Avi writes, “The idea that government should handle things at its lowest possible level—city/county, state, and then federal.” What the most local level of government may lack in sophistication and resources they often more than make up for in accountability to the voter and the ability to truly understand the nature of the problem on an individual level. Problems should only be passed further up the chain when the local government is incapable of handling the situation.

  3. Lastly, the conservative subjects ideas to the principle of prudence, which means taking the time to carefully think through the likely long-term consequences of an action and deciding whether those consequences outweigh the good we hope to achieve. Sure, we could allocate billions to build houses. But could that money be better spent elsewhere? And would the benefit of the added housing outweigh any distortions to the market or limitations to the individual’s ability to make their own decisions on how to spend the money themselves? For what it’s worth, I also wrote a series on the principle of prudence for a closer look at why it’s important.

Applying the Three-Part Test

What does Avi’s “test” tell us about the $2.2 trillion CARES Act (the Coronavirus Aid, Relief, and Economic Security Act)? Does it pass the test of prescription? Certainly, there is precedence for the government intervening to protect the public’s health and welfare. But does that justify the rather unprecedented efforts by the government to shut down American businesses, cancel public events, ban meetings of more than ten people, encourage social distancing and staying at home, and spend a record amount trying to offset the hit to the economy? Let’s venture further.

What about subsidiarity? If it was right for the government to get involved, could it have been handled at a more local level? This is the easiest of the three-part test to pass. Pandemics are like wars; they are not something each individual can easily combat without the combined resources of a central government. Nor are they something that the state and local governments can handle on their own. In the event of a highly contagious illness that endangers the nation at large, every level of government must work together to ensure a constant and consistent flow of information, resources, and directives.

Finally, there’s the matter of prudence. And here is where the rubber meets the road. In order to determine if the passage of the bill passes the test of prudence, we need to know a great deal about highly complex subjects from fiscal policy to economics to hospital capacity across the country to medical treatments to the nature of the virus itself. We would need to be able to understand the likely risks of doing nothing and measure them against the likely outcomes of doing any one of a seemingly endless array of alternative responses.

While there are plenty of social media armchair generals willing to audaciously declare that they know precisely what ought to be done, I must confess I am not an expert in any one of the highly complex fields of study touched by this question. We have arrived at the most difficult of the three tests because we are unlikely to be in a position to clearly know what prudence would suggest. We are asked to have faith in the people and institutions that are operating with limited information and attempting to balance conflicting interests, even if they do possess more than a modicum of knowledge in the various fields of study.

In other words, it seems reasonable to say that the government should do something to combat the negative economic impact created by its own policies that have put many Americans out of work and created economic devastation in an effort to combat a global pandemic. But precisely how much is enough, too much, or too little is something we don’t yet have enough information to actually know, let alone reach national consensus.

Ideally, we would have fully functioning institutions and widespread trust in our public officials so that our gut reaction in situations like this isn’t suspicion and outrage but calm confidence that they are tirelessly working on our behalf to do the best they can with limited resources and information. Lacking that, it is all the more important we keep a cool head about the situation and take care not to add to the confusion.

Mixing Our Metaphors

Sometimes it can be helpful to reduce these complex matters down to a word or metaphor. And sometimes the word or metaphor we choose does more to confuse than clarify. Since a massive Federal spending effort to combat recession has familiar overtones to the 2008 housing market crisis, it is not surprising that many have adopted similar language to describe the government’s activities here. Namely, this is being called a “stimulus” or a “bailout”.

For comparison’s sake, the Troubled Asset Relief Program (TARP) of 2008 costs $700 billion which was followed by the American Recovery and Reinvestment Act (ARRA) of 2009 costing closer to $800 billion. Both bills were often referred to as a “stimulus” or “bailout”, but they were hardly the same thing.

Governmental expenditures intended to address some economic concern can take many forms. A stimulus bill is intended to “stimulate” the economy by injecting cash into a typically wide range of business sectors. Barack Obama’s nearly $800 ARRA spending might be called a stimulus bill since it was intended to counter the effects of the Great Recession. The Obama administration’s subsequent efforts to prevent the collapse of American automakers might be called bailouts. Here the aim wasn’t so much to indiscriminately strengthen businesses and turn the economy around, but a cash infusion to companies who, it was argued, would cease operations without some outside intervention.

While the $700 billion spent under the Bush administration on TARP might be called a bailout of the banking industry, the intent was not so much to “save” the banks themselves but to prevent the collapse of America’s financial foundation. If the automakers were to collapse the impact would be terrible—leaving hundreds of thousands out of work and making it all the harder for the economy to recover. If the financial system collapsed the effects could be catastrophic, leaving businesses in every industry—include automakers—without the necessary capital and credit to operate and making recovery nearly impossible.

Those on the right can—and often do—disagree on whether interventions like TARP were warranted, though they are more or less united in insisting the Obama era stimulus and bailouts were ineffective and didn’t pass the test of prudence. But regardless of where we come down on the propriety of these interventions, it would do us well to apply labels appropriately. To that end, the $2.2 trillion CARES bill is not a stimulus or a bailout or even an attempt to save the financial sector from collapse. It is a relief bill. As Jonah Goldberg put it in a recent G-File:

“This isn’t a stimulus bill, it’s a life-support bill. It’s the difference between cocaine and oxygen, or between a shot of adrenaline and a blood transfusion. I think it was Larry Summers who first compared what we’re doing to putting the economy in a medically induced coma. Induced comas—if I know my medical TV-drama lingo—are sometimes necessary to protect the brain from certain threats. But there’s no point in inducing a coma if you don’t keep the person on life support in some way. We’re not trying to stimulate the economy. We’re trying to keep it on life support while we ride out this pandemic. The stimulus part comes later.”

A relief bill is certainly nothing new—albeit, we’ve never had a relief bill of this magnitude. But the basic principle applies: individuals are suffering the effects, through no fault of their own, from some natural or uncontrolled phenomenon and the government is offering assistance. We see similar assistance being offered when a hurricane ravages the coastline, or when a tornado devastates a town. Only, in this case, the government ordered the hurricane, presumably to prevent an even more catastrophic event.

Was This the Right Thing to Do?

Does “conservatism” tell us this was the right thing to do? Did we pass Avi’s three-part test? I am inclined to say “yes”. But it’s a soft yes, and I don’t take for granted there are other conservatives who could apply the same “test” and reach entirely different conclusions. The Editors of National Review recently gave the legislation a tepid endorsement with plenty of caveats:

“The legislation should be judged on whether it aids efforts to slow the spread of coronavirus, aids the treatment of the infected, relieves the plight of those adversely affected by it and the fight against it, and supports the overall economy. These purposes, as we noted at the outset of this debate, sometimes overlap and sometimes conflict. They also call for placing speed ahead of efficiency, and both ahead of mere partisan objectives.”
“The legislation is far from perfect. The enormous spending involved would be easier to stomach if legislators and presidents had shown greater restraint before this crisis hit or showed any interest in getting the national debt on a sustainable trajectory. But we will take our own advice. The support for business, the relief for individuals, and the expansion of medical capacity are all urgent matters. They justify a bill that, in a happier time, nobody would consider, and we ourselves would vehemently reject.”

Part of that second paragraph bears repeating: conservatives may be less wary about this legislation if it weren’t for the government’s addiction to deficit spending. The bigger issue—the one conservatives ought to be focused on most—isn’t this particular expenditure. Life is unpredictable, and there will always be black swan events that necessitate—or, at least, seem to necessitate—these large deficit expenditures.

The real issue is that we learn to live within our means during all those other times when life is stable and predictable. If a family member facing some medical emergency ran out of cash because their father had a gambling addiction and blew it all trying to win big, the real financial problem isn’t the out-of-nowhere medical expense, but the inability to be responsible when it didn’t seem to matter all that much. There may come a day when we all agree that some massive relief bill is warranted and the money simply isn’t there.