Several of my colleagues and I issued statements about the reconciliation bill Congress is currently considering. The full statement is here. My contribution is also below:
Senior Fellow Ryan Young said:
“There are two reasons for passing the infrastructure and reconciliation spending bills: fighting COVID and helping the economic recovery. They fail on both counts. Congress should turn to other policies instead. These include speeding up the FDA’s approval process for medical treatments, and lifting regulations, tariffs, permits, and licenses that are sludging up supply networks.
“Federal regulations currently cost more than $14,000 per household. Lightening that load by as little as ten percent would be an enormous stimulus that requires no new deficit spending.
“Most of the 1,684 page reconciliation bill consists of COVID-unrelated wishlist items such as more than $14 billion for forest restoration; $50 million for water research; $1 billion for antitrust enforcement; and billions of dollars in subsidies for private businesses with the right political connections.
“Because all that money has to come from somewhere else, stimulus is at best a zero-sum game. The spending bills are not creating new wealth, they are reshuffling existing wealth. Since funding is decided by politics rather than merit, the bills are almost certainly a net loss to the economy, even compared to doing nothing.
“The spending bills will use up nearly $3 trillion in capital that instead could have helped struggling businesses take loans to stay afloat or grow; that could have gone towards adapting supply networks to post-COVID conditions; and that people could have invested in themselves to improve their future prospects.”