Money & The Economy

New Federal Aid Is ‘Broad and Flexible,’ except Where It’s Not

Earlier this year, President Biden signed a $1.9 trillion COVID relief law known as the American Rescue Plan. As part of the package, $350 billion was set aside for state and local governments, and that money is being delivered starting this week. But while the federal government is promoting this funding as “intentionally broad and flexible” so that local governments can tailor the spending for local needs, the reality is that they have included some major strategic restrictions.

“The Treasury Department said Monday that governments will be compelled to spend the cash infusion ‘to meet pandemic response needs and rebuild a strong, more equitable economy,’” CNBC reports. “Importantly, Treasury officials said states and territories are not allowed to use the funding to offset lost revenue as the result of a tax cut or make a deposit to a pension fund.”

So on the one hand, the federal government is saying that they believe decisions are best made locally because local officials better understand the needs of their communities. But on the other hand, they insist that local officials refrain from using this money to cut taxes or boost pension funds, because the federal government clearly knows that these things won’t be helpful, regardless of the local context.

Give me a break.

Of course, the irony of having this restriction placed on government “aid” is that cutting taxes is probably one of the most helpful things a local government could do. After all, even state and local governments have insufficient knowledge to efficiently direct resources. Only individual consumers are local enough to know what’s best for themselves, so they would be far better off if they were simply allowed to keep their own money in the first place.

So while I guess it’s nice that the federal government is at least giving lip service to the importance of local decision-making, it would be a lot better if they took that idea to its logical conclusion for once. Namely, let individual consumers determine how to spend their money rather than having bureaucrats spend it for them.

This article was originally published on FEE.org

Patrick Carroll

Share
Published by
Patrick Carroll

Recent Posts

Should my Spouse be getting half of my Social Security amount? 

Dear Rusty: I was referred to you to ask a question about Social Security benefits. I…

6 hours ago

The 11th Circuit Can Put An End To Political Lawfare

Although the previous administration has ended, its regulatory approach remains, harming seniors, American businesses, and…

6 hours ago

It’s Time For Corporate America To Get Back To Business

American companies face a critical choice. In the wake of deepening polarization and social turmoil,…

6 hours ago

Trump Sending Troops To Portland To Protect ICE Facilities Amid Antifa Threat

President Donald Trump announced Saturday his administration is sending troops to Portland to protect Immigration…

19 hours ago

Supreme Court Lets Trump Admin Hold Back $4 Billion In Foreign Aid

The Supreme Court allowed the Trump administration on Friday to hold back $4 billion in…

19 hours ago

Richard Grenell Reveals Trump’s Plan To Rescue The ‘Dying Arts’

WASHINGTON — Kennedy Center president Richard Grenell suggested the iconic D.C. cultural venue’s recent success,…

19 hours ago