When the coronavirus first ravaged the United States and brought the economy to a standstill, we all knew some form of government response was needed. Republicans and Democrats came together and, in typical bipartisan fashion, burdened future generations with trillions more in debt with a massive relief package that they promised would help turn things around.
It isn’t exactly working out great: The CARES Act has resulted in crony subsidies for giant corporations and a broken unemployment insurance system that is paying people more to stay home than to rejoin the workforce. But the dysfunction doesn’t stop there. New reporting reveals that not only is the government’s coronavirus relief effort flawed in its very structure, but that its implementation has failed abysmally.
The CARES Act provided massive sums of federal money to augment state-level unemployment insurance programs. However, it did nothing to ensure that these state-level bureaucracies would actually function. They struggle enough with that during normal times, but due to the more than 30 million who have filed for unemployment in the last six weeks, state welfare agencies are all but falling apart at the seams — meaning the government’s ability to help people through this crisis is severely limited, to say the least.
Take Florida, for example. Axios reports that roughly 7 in 8 Floridians who have filed claims for unemployment benefits between mid-March and early April haven’t had their applications processed yet. And this isn’t a one-state phenomenon by any stretch.
The left-leaning Economic Policy Institute found that for every 10 people able to successfully file for unemployment, three to four couldn’t get through the system to make a claim, and one to two chose not to because it was too difficult. In total, the study concludes that 9 million to 14 million eligible people were thwarted from accessing benefits by these systemic failures.
What liberal Democrats and big-government Republicans alike don’t seem to realize is that this kind of wide-ranging government failure is built into the system by design. It will almost always plague any big-government intervention into the economy, no matter how benevolent or well-intentioned said intervention may be.
The Cato Institute’s Chris Edwards tried to answer the question: “Why does the federal government fail?” and came up with five key reasons:
2. The government lacks knowledge about our complex society.
3. Legislators often act counter to the general public interest.
4. Civil servants act within a bureaucratic system that rewards inertia, not the creation of value.
5. The federal government has grown enormous in size and scope … failure has increased as legislators have become overloaded by the vast array of programs they have created.
These failures and flaws are systemically ingrained in any wide-ranging economic intervention launched by the federal government. So, even if you can chalk up some of the CARES Act’s flaws to its specific design, the fact is that such a top-down big-government effort to respond to the coronavirus was always destined for failure.
