This is Not the Great Depression…Yet

May 13, 2020
By Timothy Sandefur

In this morning’s edition of The Dispatch, I explain why, as bad as the economy is now, there is no reason why it couldn’t regrow—unless the government handicaps recovery by trying to “help” through make-work projects, bailouts, and burdens on businesses that will prevent workers and business owners from putting their resources where the market needs them. Here’s an excerpt:

Not only do bailouts deter people from transferring resources to areas of the economy where they’re needed, but bailouts must also be paid for (assuming they’re ever paid for) out of taxes that come from the capital of enterprises that are currently successful—that is, those businesses that are serving customers now, rather than sitting idle. Bailouts therefore hurt those industries that respond well to the crisis, and reward those that don’t.

Tariffs, which are a bad idea even in normal times, are especially foolhardy in hard times. They act as taxes, depleting the resources that businesses need if they are to transition to serve the new forms of demand—and they raise prices for things shoppers need, at just the time when people need to stretch every dollar. Forcing an unemployed father to spend more money on a T-shirt because it was made in China instead of New Jersey is deeply inhumane.

You can read the rest here.

Timothy Sandefur is the Vice President of Litigation at the Goldwater Institute.