Inflating the Gravy Train — Clueless Bureaucracy Thrives During COVID

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Vermont’s seemingly unrestrained spending during the COVID pandemic reveals the unsustainable fantasy world in which the current ultra-Progressive Legislature has taken lodging. Like minimum wages, throttling up spending and debt ultimately hurts the very people who are supposedly the object of government relief.

COVID increased citizens’ needs: Vermont’s bureaucracy responded with business as usual, ramping up spending while creating new departments, payrolls and powers for itself. It is taxpayers and the poor who will shoulder the eventual consequences of this folly, as a vicious cycle of inflation and dependency is inevitable.

Economies grow by producing goods and services, not issuing edicts and printing money. America’s economy has shifted increasingly to the service sector in recent decades, and this has included an explosion of nonprofits furthering numerous social causes. Vermont’s tax receipts plummeted when COVID struck, reflecting the reality that government is dependent on those who work and earn to finance its very existence. This is true even of federal funds, which many profligate states treat like free money but which derive from taxpayer pockets.

As Vermont’s businesses suffered under COVID edicts, government jumped to the rescue. And expensive and regressive boondoggles like electric vehicle programs were not to be left behind for a mere pandemic. Without astronomical sums of federal money, the Vermont government would have been compelled to live within taxpayers’ means. Instead, it went on a credit-card binge with funds yet to be repaid.

Now that COVID is largely past, 130 “businesses and organizations” signed a petition asking Gov. Phil Scott to extend funding for inefficient and regressive food programs. The petition reflects the ignorance of basic economics that underpins the “government-as-answer-to-all-problems” mentality that is parasitically destroying Vermont’s economy by draining capital from private industry. Vermont’s government is fast becoming “too big to fail,” but too expensive to afford. This is why Vermonters’ median incomes continue to decline year after year, while their government and its employees steadily increase in size and wealth, respectively. The numbers don’t lie: math won’t bend for noble ideological dreams.

Both nationally and locally, the nation risks being dependent on an artificial government teat. Though some COVID relief was necessary, pumping the money-supply pedal has created a lethal economic cycle from which there is no clear escape. Many people have received higher incomes during COVID than prior, augmented by housing or other supports, rent abatement, food programs, etc. While some consumer debt has been paid down, this extra income has also permitted consumer spending to remain strong.

Yet throughout the pandemic, the moral hazard encountered by employers and businesses is that people receiving support don’t wish to work — why should they, especially if they receive more income staying home? Many businesses have closed or shrunk, and many jobs and tax revenues will be absent post-COVID. If the government now shuts down the payments, tightened consumer belts will dampen spending, causing decreased demand and production, thus further depressing both jobs and wages. Yet if the government keeps printing money and disbursing funds, inflation will creep in — it already is. And inflation atop record debt is a bad recipe for our economic future. Poverty, homelessness, and hunger will increase, not decrease.

It is painful to watch those who decry capitalism suffer from its inexorable consequences. People act in self-interest, whatever one calls their economic system. Government cannot obviate the realities of money supply and limited resources, or of the central importance of human capital and behaviors, simply by declaratory fiat.

But that is precisely what is being done. In Vermont, Governor Scott heeded that call from the petition to extend pandemic spending even while there is no pandemic: he issued an “executive order” that extends access to federal funding for certain housing and feeding programs. But the more money is printed, the more will be required to fuel the perpetual-motion illusion — printing money is not a viable or sustainable economic model, any more than having the government operate an entire society and economy.

The petition says it all:

“Loss of funds tied to the declaration of emergency that are helping households afford basic needs in this unprecedented time would be detrimental to Vermont’s economy and health.” (Translation: the economy depends on government spending of money it siphons off the economy)

“…while we share hope that many aspects of life are returning to normal, for many Vermonters, the emergency is far from over. And given Vermont’s dearth of low-income housing and a food insecurity rate of 1 in 10 prior to the pandemic, “normal” was never acceptable.” (Translation: this is not about COVID — this is an ideological demand for free money to eliminate poverty, ignoring how real incomes are declining while bureaucracy thrives).

“Hunger remains higher than ever before and levels have not decreased in the past year; an eviction crisis still looms; hunger and housing insecurity also disproportionately affect families with children and BIPOC Vermonters…. 12% of Vermonters report that their children aren’t eating enough because families can’t afford food, and 23% are struggling to cover usual household expenses…. The charitable food and shelter systems simply cannot be a sustained support for all of these needs.”

(Translation: this is not sustainable, so please print more money now so we can help ensure it is even more impossible to dig ourselves out, and even more people starve. And despite all that spending, much of it regressive and wasteful, more people are hungry than ever before…. We have failed to solve the problem we now demand you print more money to send us so we can solve).

“The State of Emergency supports our businesses as well as the most vulnerable. Since March of 2020, the Department for Children and Families Economic Services Division has issued over $45 million in emergency allotment benefits to 3SquaresVT households. These funds not only support the food budgets of nearly 70,000 Vermonters, but they stimulate our economy and support our local food retailers and farmers by keeping millions of federal dollars each month in our communities, especially during the summer and fall months when local food is abundant in stores and at farmers markets throughout the state.

(Translation: look at how our Stalinesque takeover has helped “keep” the federal dollars taken from Vermonters, and how we bureaucrats have saved both the poor and businesses! Don’t worry about paying any of that back — that’s simply not something to be bothered by — people are starving!).

“We believe that unless a new plan is in place to ensure all in Vermont can meet these two most basic needs, our entire recovery is jeopardized.” (That is, unless government saps the wealth of earners to guarantee everyone free food and housing, the economy might suffer).

This economically oblivious petition was crafted mostly by nonprofits who are in the business of getting their overheads and salaries paid by government grants and programs. They have no concern about where the money comes from, or even whether the people they purport to benefit lose their jobs or pay more for gasoline, rent and groceries. They are disconnected from the real economy, as they are from understanding “real economics.”

Just like Governor Phil Scott and the Progressives, who have been steadily grinding Vermont’s economy into the ground in the name of “equity” programs, and saving us all from ourselves. But the Bloated Dome gravy train is wobbling, and will go off the tracks soon. Who will they blame but themselves?