I am not a conspiracy theorist. I leave that up to those who have the time to do such things. However, I am an observer of trends. What we all have witnessed during this pandemic have been behavioral and political changes of epic proportions.
As the outbreak spurred a government-led shutdown of the economy, many were left wondering how to make ends meet with no revenue, wages, etc.
The merits of such a shutdown can be debated by those in health care and politics.
Once the shutdown was a reality, the government came in with “help.” Trillions of dollars in spending resulted in grants, loans, unemployment benefits, and other entitlements.
The number of first-time recipients of government assistance hit an all-time high. People who would never take a “handout” found themselves jumping through hoops to get in line for the funds.
Some of us raised the question about the long-term costs of such “generosity.” The answer coming from those holding the purse strings was the same. “We cannot do nothing.”
Whether established with good intentions or not, the “funding of America” has created some interesting consequences.
People on unemployment are refusing to return to work because they make more money at the house than at the job, thanks to federal stimulus.
Businesses are paying people that aren’t working full time hours in order not to jeopardize the forgiveness of their Payroll Protection loans.
State and local governments are all but begging Washington DC to help bail them out of financial straits.
None of this makes financial sense, but it does make political sense.
Ever since FDR’s “New Deal,” people in political circles have learned that once you “give” someone an entitlement, you can control them with the threat of taking it away. Each political cycle brings the same threats.
Seniors are told if they vote a certain way, their Social Security, Medicare, or other benefits are in jeopardy.
The impoverished are told a wrong vote could eliminate welfare, food for their children, education opportunities, or worse.
In a post-pandemic election cycle, is it possible the threat of losing additional stimulus could be aimed at small-to-medium-businesses, the middle class, and the like?
Bill Clinton rode, “It’s the economy, stupid,” all the way to the White House. What happens when the government controls the economy instead of the free market?
The government’s economic response to this pandemic may have been made with the best of intentions, but make no mistake, the effects of this response is a market that is now becoming more reliant on entitlements to function.
As we attempt to bring our economy back to normal, whatever that means, we need to be wise in how much we turn to the government for assistance. At the end of the day, there is no such thing as a free lunch, and the borrower is always a slave to the lender.
David Specht is the publisher of BIZ. Magazine.