Opinion | Coronavirus Killed Small Government Gospel


This is the story of much of what went wrong last year. Doctors and nurses were left without basic protective equipment because the United States did not have the manufacturing capacity to produce it. Efforts to track and contain the virus have been delayed by bottlenecks in test production and shortages of additional equipment such as swabs. Once the tests could be administered, the scarcity of test processing equipment across the country prolonged the delivery of test results.

The reason: more than a decade later hospital closing crisis, the United States faced a shortage beds and medical facilities needed to manage an emergency. Hospitals invaded by Covid-19 patients hijacked ambulances. Vaccine distribution, although improving steadily, has been hampered by shortages in both recruitment and supplies. The poor local government infrastructure further dishonored the deployment. Websites are collapsing, phone lines are busy, parking lots are full.

These are not just public health failures, but also economic failures – an inability to mobilize resources to solve a problem. And the often toxic incompetence of American political leadership has obscured the structural causes of this failure.

The United States has once maintained a strong commitment to public investment in areas such as spaceflight, medical research, the interstate highway system, and internet development, backed by the Republican and Democratic administrations. Staying at the forefront is expensive: between 1965 and 1980, federal spending on scientific research, physical capital and education regularly accounted for around 2.5% of GDP, or more than $ 500 billion today.

But that number fell in the 1980s. In Mr. Trump’s first year in office, Washington was spending less than 1.5% of its GDP on public investment, according to an analysis of Data from the Office of Management and Budget of the Progressive Policy Institute, a center-left think tank. Before the pandemic, that plunge meant collapsing bridges, Amtrak derailments, and other disasters Americans had come to consider inevitable. During the pandemic, this same chronic underinvestment resulted in massive death. Even the typically conservative American Chamber of Commerce has spent years unsuccessfully lobbying for major increases in federal infrastructure spending.

Yet despite this persistent inability to mobilize resources, the US government has proven to be reasonably adept at summoning and allocating money. The Federal Reserve has supported the financial system and big business. Congress saved thousands of small enterprises with its $ 660 billion paycheck protection program, while saving the finances of millions of Americans by increasing unemployment benefits and sending checks to households.

Of course, the increase in unemployment assistance should have continued to flow for the last five months of last year. And aid to states and local governments to fight the pandemic was insufficient. But where the problem was a shortage of money, the government kept its promises. Cash flow constraints have not hampered his rescue efforts, at $ 5 trillion and above. Even the loudest moderates of Joe Biden’s Democratic Party did not back down from the $ 1.9 trillion cost of the Covid-19 relief bill he passed on Thursday.

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