The Government Shouldn’t Exacerbate The Recovery Effort To a Problem It Helped Manufacture

It might be a conservative rallying call to proclaim that the “government has gone way too far”, but you wouldn’t eat at a restaurant if they kept serving food that you didn’t order, especially when it’s on your dime.

Sad to say, this has been the norm for the US government for decades, breeding a persistent culture of overspending and running large deficits, with the most recent budget deficit for this year standing at an astounding $744 Billion, with an estimate of $3.7 Trillion in total by the end of the year according to the Congressional Budget Office.

Before the current crisis, the US was already fighting a multitude of internal obstacles such as the high cost of urban living, automation, and a skills gap, that amid recent circumstances will undoubtedly cripple the labor market in the long-run.

COVID-19 presents a unique challenge to the country, further complicated when we consider the government’s response. While it’s paramount that the government coordinates with the private sector to develop a vaccine to resolve the crisis, the reality is that the government is doing far more than it ought to be.

The Paradox of Government Welfare

Since early March, I have been working remotely, thankfully having an employer that is flexible and allows me to earn a paycheck from home, as most white-collar firms have done, with several firms even beginning to extend that benefit permanently.

Around this time, however, governments began to lockdown business and social activity, restricting people from living their lives and essentially denying them their rights for the sake of slowing the virus. This move was short-sighted and inevitably led to layoffs, furloughs, business foreclosures, and a nationwide protest movement.

Yet, the government decided that in order to adequately respond to the same problem that they created, they would offset the economic damage by providing hundreds of billions in unemployment benefits, amounting to some individuals receiving more money than they did from their actual jobs.

The dangers of this level of government economic intervention in the labor market are inconceivable, with millions of people becoming dependent on the government as a lifeline to their self-preservation en masse. This has manufactured a system that renders jobs irrelevant and will be catastrophic for businesses once restrictions are lifted.

The Penalty of Past Incompetencies

In the midst of these capricious shocks to the labor market, firms are forced to adopt new practices or risk their survival. Logistics companies such as Amazon, UPS, and FedEx have continued to implement robotics into their supply chain operations, and with coronavirus, other retail companies such as Gap have also begun using robots in order to respond to the labor disruption.

With millions of Americans home, relying on government assistance, this is only the first challenge we face for the sluggish economic recovery ahead.

For America’s urban centers such as my native New York City, the future for property owners and renters presents a grim picture, where skyrocketing rents and mortgages already created an unsustainable cost of living.

In cities like New York and others with already large homeless populations, the coronavirus disruption is expected to cause city residents to flee, decimating the job market, and crushing the real estate market, potentially creating areas of perpetual poverty.

If fleeing jobs and automation weren’t enough, the country remains to have dealt with a skills gap, where according to a recent study by Adecco, 92% of business leaders expressed that American workers are insufficiently prepared for the workforce.

Preventing a Dystopian Future

Holistically, when we factor in each of these trends, the future looks bleak for the American worker. With no plan in clear sight, the economy is on a path to devastate urban housing markets, decimate millions of jobs permanently, all without any proposition for skills-based training to compensate for job losses.

How then do we fix the mess that the government’s erratic actions have created?

With an equanimous approach that judiciously tends to the needs of the American worker, and this requires concise action and unquestionably limited spending from the government.

As the great Benjamin Franklin famously professed “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

The primary step toward recovery is by restoring the rights of the American people. Without providing people the liberties to manage their own circumstances, we shouldn’t expect the government to provide the right solutions. Yet, as it is their role to supply those rights to the people, it is critical for them to lift restrictions and open the economy, and fortunately, states have begun to as such.

Through this approach, the American people, businesses, churches, and schools can best figure out the best approach to rebuild their own communities, without a paternalistic government as an overseer.

The road to recovery will be long-lasting but as with all major problems, American ingenuity is a product that comes into fruition through the independence of mind and approach that we so dearly hold.

Parveen Singh is a financial communications consultant based in New York City.