Plain and simple, the Federal government sucks at policy. You would think that they wouldn’t as that is pretty much their entire job. But, they aren't just bad, they’re systematically terrible. They make terrible choices, they overreach their constitutional authority, and everything's an argument. Politicians were once active and contributing members of society. This kept them grounded and ensured that their decisions were truly thought through, as they returned to society after their civil service. Now, politicians are almost a breed of their own. There are career politicians who never live in everyday society. We rely on them to make decisions though at the end of the day they continue to undermine our great country and everything it could be.
There are a lot of reasons why our government is so bad at making effective policy. To begin, no one wants to be “that guy”. Inside of the standard majority political views no politician wants to be the one to go against the grain. They may show some opposition to ideas but in practice their voting habits show strong conformity to party expectations and norms. In a study by the Congressional Quarterly Almanac (titled Party Unity On Votes At Near-Record Levels Despite Dissension), who provide annual studies and reports on congressional activities, found that congressional caucus voting has increased from it loa in early 70s around 60% to its peak in the early twenty-teens and has maintained that 90% threshold since. Many other independent sources, regardless of bias, found similar results. Forbes, The Washington Post, the Pew Research Center, and more all find themselves coming similar conclusions. It's clear that there are certainly expectations set and modern politicians has no room for those who make waves.
Compounding the issue of parties playing the popularity game when it comes to voting is that everyone wants their piece then they just throw some cathay name on the bill and unfortunately that's usually enough to get by. This is something we have seen time and time and time again. From the 400+ page spending bill that was apparently read through and agreed upon in just days in December in 2022. In that same year we saw the Inflation Reduction Act which seemingly had more to do with energy and emissions than actual efforts to reduce inflation. With so many interested parties trying to get their piece of the pie, instead of saying if you do like it then don't have any of this one they just make it bigger and bigger, mixing in a little bit of what everyone wants until they end up with a mess so big no one really knows whats in it, but at least everyone gets piece.
Congress will find any excuse and slap that headliner name on it to try and get done whatever is it they are “dedicated” to for that month. Inflation, COVID, bank failures, injustice, car sales are too low, you name it and the government has weaseled legislation under the mask of these events. That's not to take away from the real national problems we face. The government just uses them as shells for whatever they are trying to pass or get done which ultimately leaves us worse off than before. This problem isn't like they play the margins of what could be considered to fall under the issue the name of the bill is supposed to be addressing. The Foundation for Economic Education reported that in the weeds of the bills passed aimed at COVID and economic relief in 2022 there was millions spent on initiatives like creating new camouflage for the Army that didn't turn out to match their targeted landscape, building a Gandhi museum in Texas, aid to Tunisia ( a country in Northern Africa) to boost their travel sector, and more. As stated, it's not necessarily even that some of this spending was “wrong” so to say. But, don’t call the bill the This Will Fix Inflation and Give Everyone A Unicorn Bill of 2023 if you’re printing money and giving half of it away.
I will throw them a bone, but a small one at that. Bills can take upwards of weeks to fully make their way through the system. While that may not seem too long, that would greatly limit the number of items up for discussion. There are 535 members of congress that in some aspect need to come together and make these decisions. I coach little league baseball and I can't get 11 parents to meet up at a specified location at specified times effectively. But, that also shines a very bright light on another issue, they are severely overreaching their constitutional authority. If they allowed states to make more of the decisions they were set to, it would significantly cut back on the Federal Government's responsibility. Education, the highway system, department of labor, and more. That may sound drastic, like what would we do without all of those regulatory agencies?! The truth is,we do not need them at the federal level. If the citizens of states decided they wanted them and they were run at the state level, the states would be much better at running them.
Finally the government relies too much on theories that do not work while ignoring important theories and concepts that do. For instance, one of the biggest economic problems we face comes from the idea that unemployment and inflation have an inverse relationship. While there may be some very short term applications to that concept, it is not applied that way nor does it simply work out that way in reality. The theory comes from the thought that if interest rates are low, then business can be stimulated by cheap loans, therefore unemployment should go down as there are more businesses. As interest rates rise, it becomes more costly to do business, therefore unemployment is higher. Stagflation, or a rise in inflation and unemployment, is theoretically impossible yet we have been seeing it happen right in front of us. The Federal government response has been policy and an attempt at fiscal manipulation through interest rate changes. While recently they have been increasing rates, at the end of the day rates are still not above true inflation and they've already signaled that by 2025 they will be cutting rates back down again. Economic adjustments happen on very long time scales. But those in charge are making changes every few months in some cases and then attempting to determine cause and effect off of that. Through that, it ultimately comes down to the same wrong place time and time again, more policy and regulation.
Accompanying the inability to discern between theory and practical application, there is the incorrect application of two economic theories that work in tandem with one-another. Ceteris Paribus is the concept of “all other things being equal”. This is a very basic theory taught early in economics to help understand entry level cause and effect. It says something like say you buy a different car, it is exactly the same car (make, model, year, miles, etc.) as the one you had except before you had a blue car and this one is red. Next month you notice your insurance went up. Ceteris Paribus would argue all other things being exactly the same, your insurance must've gone up because your car is red. This is obviously an extremely simplified example that may hold some truth, but the theory gets extrapolated out to the least applicable initiatives. One would be government healthcare. It is often argued that if you look at how much people go to the hospital, there are methods that could make this work. They act as if all other things would be equal. As if they made healthcare government provided tomorrow that that would not inherently change people's mindsets about healthcare, how much they would use it, how hospitals and doctors offices would operate, how the government entities to handle it would change and how that would change government spending, it goes on from there. With that they apply no moral hazard evaluation.
Moral hazard is basically a lack of effort or incentive to protect yourself or others from the consequences of the risks of a decision. For instance, look at the banking sector. The moral hazard of backing banks when they make poor financial decisions and fail, even in the good intention of wanting the bank customers to not lose their money, is that the banks will act more risky because they know at the end of the day the money won’t be lost. When the time comes that a bank does fail and the government does step in to bail them out, other banks see this and believe that they can be just a bit more risky because even if they fail they know the money will be returned. Banks begin playing the high end risk margins that they wouldn't play if government backing didn't exist. Then the government does something like raise interest rates to 5% (that's not an argument to keep rates low) and suddenly banks are holding onto millions of dollars worth of underwater mortgages and long term loans and they are holding their breath that no one defaults or wants to withdraw their money.
With all that being said, plain and simple the government is not good at making policy. They don't want to cause waves and go against their party, no matter how much they may pretend they will or want to. They'll find any excuse to bring a new bill to congress, give it some outlandish name, and then fill it with everything except what it is supposed to be for. Then when someone on the other side votes against it we see it across the news as “Representative so and so voted against the Puppies Deserve Daily Treats Bill”. Finally they have no grasp on theory, application, risk, or cause and effect. Though history has shown us time and time again what does not work, quite well at times, this time is different and they have the solution hidden amongst their 400 page document that all 535 members of congress diligently study. While there are undertones of sarcasm and frustration through this article, it truly is unfortunate. Now we as a country have found ourselves in a palace where the solution for too many is just throw out the entire system. There is nothing wrong with the system, I believe it truly is the best on earth and in history. It was set up the way it was for a reason with checks and balances and power diminishing as it gets further from the people. It has all been flipped upside down, broken and barely standing in the shadow of what was once great.
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