Shortly after April 7, I by chance discovered that my Savings Account had been enlarged $1,400.00 by the Economic Impact Payment (“EIP”) authorized by the American Rescue Plan Act of 2021 (“ARP Act”); this amount yet remains there untouched, pending a decision of how to respond to it. (By being bypassed by the $600.00 EIP authorized by the Consolidated Appropriations Act, 2021 (“2021 Appropriations Act”), I was relieved of the earlier necessity of any decision on how I should respond.)
I, at the time of the enactment of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), considered the $1,200.00 EIP authorized by it to be a prudent response to the severe disruptions caused both by private and public actions in response to the unforeseen COVID-19 onslaught. This was an invasion for which adequate preparations could not have been instituted, and which then appeared to require certain protective action — albeit the scope of such action being then and later still problematic. The response caused extensive unanticipated hardship for which few could have prepared, thus justifying some financial relief for those afflicted.
The passage of time though allowed modulation in those putative protective actions, as experience enabled clarification about those measures that were or were not effective and those that were or were not necessary. Moreover, interim medical advances had ameliorated, to some extent, the danger caused by this virus and the prevalence of being afflicted by it. Therefore, in my mind, by the end of 2020, the necessity of further financial relief was questionable.
I thus then, when the expectation of being confronted with the receipt of an additional $600.00 EIP presented itself, realized that a decision would apparently be required. Accordingly, I investigated whether a response was available and discovered that a mechanism existed for rejection of this payment. I then conceived providing a response, to accompany a check returning this amount, in the following possible terms:
“As acceptance by me of this amount of $600.00 would constitute my contributing to the continuing fiscal and moral bankruptcy of this nation — the repercussions and dangers of which are already and will be further manifold, and an apparently-constant progression in which I decline to participate — I hereby refuse and return the amount of this second Economic Impact Payment.”
The absence of receipt thereof however allowed me to defer the decision to take this action. Now, though, I no longer have this luxury.
For all of my adult life, a period which alone is of no-small duration, the juggernaut in the District of Columbia has demonstrated little inclination to quench its insatiable appetite. While there have been periodic, albeit few, aberrations by way of limited retrenchments in its expansion, the direction of the process has generally been unabated. In this both major political parties bear substantial fault.
As the benefits to be conferred are usually more visible than the costs to be incurred, new or expanded entitlement programs have the intrinsic greater potential to garner advocates and popularity. The existence of this potential is regrettable for various reasons, not the least of which are: the engendered expectation of the permanence of these benefits as well as the accession by additional ones; and the weakening of the fiscal health of the nation, a severe (perhaps fatal) condition already apparent. Nevertheless, these considerations have not proved to be frequently successful in hampering the enthusiasm of expansion advocates.
Yet it now though appears that there could be an exponential growth of this monstrosity we call the Federal Government. While the necessity of the CARES Act was partially justifiable, there was still significant wasteful excess in it. Far less justification existed for components of the 2021 Appropriations Act and the ARP Act; moreover all three (3) of these Acts inordinately increased the U.S. National Debt. However, though the adverse impact upon the current and future fiscal and economic posture of the nation through the exorbitant magnification of debt from these Acts can already be envisioned, the deterioration will pale in comparison as a result of the projected cost of new programs proposed by the current administration.
While the proposed American Jobs Plan and American Families Plan would constitute the largest expenditures, it is expected that further likely proposals would also substantially increase Federal expenditures. The expenditures for those two alone would aggregate in excess of Four Trillion Dollars ($4,000,000,000,000.00), in addition to the One Trillion Nine Hundred Billion Dollars ($1,900,000,000,000.00) authorized by the ARP Act. Whether either of those plans is enacted, or whether sufficient revenue is generated through new tax revenue in order to pay for those expenditures, is of course presently unknown. Suffice it to say that these proposals, along with the CARES Act, the 2021 Appropriations Act and the ARP Act, have and would greatly expand the role of the Federal Government in both the economy and Civil Society. (While non-fiscal proposals of the current administration would also greatly expand the role of the Federal Government in Civil Society — many, if not most, of which the author considers highly objectionable — this post is limited to considering the ramifications upon the economic and fiscal health of the nation. Therefore any comment on the excess intrusiveness of these other proposals would be deferred to possible later posts.)
While these incipient proposals would exponentially increase the National Debt, this insatiable trend has been consistent now over more than the last Half-Century. (A PDF version thereof may also be reviewed.) With rare exceptions all administrations, of whatever political composition, have demonstrated their addiction to extravagant spending. The warnings by the Congressional Budget Office of the unsustainability of these expenditures and deficits have generally fallen on deaf ears. As graphically demonstrated, not only does the recent accentuation of the National Debt consume a far greater proportion of the Gross Domestic Product (“GDP”) than it did on average over the past Half-Century, it now is equal to One Hundred Percent (100%) of the GDP!
In the opinion of the author, as well as many others, this is clearly unsustainable. To liquidate it: in say ten (10) years, we would have to reduce all expenditures to equal revenue, continue to pay the same amount in taxes as currently, plus divert an additional Ten Percent (10%) of GDP to its payment; or, in say one (1) year, to continue to produce at the same rate but for every inhabitant to simultaneously go into suspended animation for a year! Thus, to the author, it clearly appears we are already in a Crisis Situation.
It is tendered that perpetuation, much less accentuation, of the present course can only result in extreme social upheaval, inasmuch as: increased diversion of fiscal resources to and through the government would cause economic disruption by supplanting the natural and ordinary employment of those resources by the populace; and social disruption through the corollary preference of certain social sectors and denigration of others, as these policies by definition would only benefit those selected recipients who are anticipated, by the use of those resources, to contribute to or enable the attainment of the objectives thereof. But perhaps only an extreme social upheaval can result in an inversion of the present destructive path and a reorientation toward reduced governmental participation in and ramifications upon the economy and Civil Society.
Even a Crisis Situation can degenerate into a more-critical state, as there are degrees of crisis. At an earlier stage of a crisis certain actions can be taken to eliminate the causes and remediate the damage; at later stages the scope of those actions are restricted, and ultimately reach a point where any effort is virtually, or absolutely, ineffective. If there was presently any indication of sufficient awareness of this crisis, then vigorous advocacy to inspire corrective efforts by those with this awareness is apropos. However, from what is reported, it appears that few in government are sufficiently-concerned but rather that most are feckless.
Perhaps then the prudential course is to accelerate the crisis by exploiting the opportunities offered — and thereby assist in a propulsion beyond the brink of this fiscal and moral bankruptcy — in order to broaden the awareness of this crisis and make it apparent to even the most injudicious. In this instance it might consist of acceptance by everyone of every EIP and other opportunities that might be offered. But is this the most-principled course?
In embarking upon a course to attain an objective one is often confronted by the conundrum of adhering to principles consistent with the objective and actions, albeit possibly contradictory, more-efficacious in attaining it; compounding the question is the effectiveness of one small action among many countervailing ones. Yet can the action, combined with a declaration of the rationale behind it, resolve this conundrum? Hence the quandary …
WAYNE A. SMITH
Sanilac County, Michigan USA
07 May 2021