The Hidden Keynesian Stimulus

Or maybe it should be called a Lernerian stimulus? Either way, this excellent story about the USDA touches on an important reason why so many ‘anti-government’ U.S.-ians are fine with receiving government assistance–they don’t realize they’re getting government aid (boldface mine):

A small fraction of its massive annual budget ($164 billion in 2016) was actually spent on farmers, but it financed and managed all these programs in rural America—including the free school lunch for kids living near the poverty line. “I’m sitting there looking at this,” said Ali. “The U.S.D.A. had subsidized the apartment my family had lived in. The hospital we used. The fire department. The town’s water. The electricity. It had paid for the food I had eaten.”

…Ali Zaidi had watched many billions flow through the first and a few billion flow through the second. He thought it highly unlikely the Trump administration’s budget cuts would have much effect on the farm dollars. A lot of that money went to big grain producers. The same Republican senators from farm states who said they abhorred government spending of almost any sort became radical socialists when the conversation turned to handouts to big grain producers. “The money follows the political power of the constituencies,” said Ali, “instead of the evidence of need in America. If you really boil down the difference between the farm side of the budget and the rural-development side of the budget, the farm subsidies can wind up in the pockets of large corporations. It’s the rural-development money that tends to stay in these communities.”

Without that money, he thought, rural America would be a very different place from what it is. “Without the U.S.D.A. money it’s possible we’d look like sub-Saharan Africa, or rural China,” said Ali. Small-town America is dispersed and disorganized and poor. The people in those communities don’t have the money to hire Washington lobbyists.

A way of life depends on federal subsidies. “It’s preserving an emotional infrastructure,” said Ali. “We have decided this is the type of community we want to preserve. But the entire time I was in the White House, we grappled with the question: Where do we find the political capital for rural development? Because it can’t just come from the people rural development helps.”

…As the U.S.D.A.’s loans were usually made through local banks, the people on the receiving end of them were often unaware of where the money was coming from. There were many stories very like the one Tom Vilsack told, about a loan they had made, in Minnesota, to a government-shade-throwing, Fox News-watching, small-town businessman. The bank held a ceremony and the guy wound up being interviewed by the local paper. “He’s telling the reporter how proud he is to have done it on his own,” said Vilsack. “The U.S.D.A. person goes to introduce herself, and he says, ‘So who are you?’ She says, ‘I’m the U.S.D.A. person.’ He asks, ‘What are you doing here?’ She says, ‘Well, sir, we supplied the money you are announcing.’ He was white as a sheet.”

Salerno saw this sort of thing all the time. “We’d have this check,” said Salerno. “We’d blow it up and try to have a picture taken with it. It said, UNITED STATES GOVERNMENT, in great big letters. That was something that Vilsack wanted—to be right out in front so people knew the federal government had helped them. In the red southern states the mayor sometimes would say, ‘Can you not mention that the government gave this?’” Even when it was saving lives, or preserving communities, it remained oddly invisible. “It’s just a misunderstanding of the system,” said Salerno. “We don’t teach people what government actually does.”

This worth noting, since the Republican tax plan would have the states that already send more to the federal government than they receive pay even more taxes. Stimulus for me, but not for thee….

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One Response to The Hidden Keynesian Stimulus

  1. This is a necessary consequence of Post War Objective journalism. Their ethics are quite clear: attack power. That means a clear and consistent bias against portraying government doing good.

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