Economy & Business

The Pandemic’s Web of ‘Temporary’ Government Programs

President Joe Biden and Vice President Kamala Harris receive an update on the fight against the coronavirus pandemic as they visit the Centers for Disease Control and Prevention (CDC) in Atlanta, Ga., March 19, 2021. (Carlos Barria/Reuters)
Why mask mandates, super-charged unemployment benefits, and the like have stuck around.

Nobel Prize–winning economist Milton Friedman famously quipped that “nothing is so permanent as a temporary government program.” If only he’d lived to see this pandemic prove his words so prescient.

When COVID-19 first reached our shores in early 2020, Americans acquiesced to sweeping expansions of government power in order to corral the virus and protect those at-risk — all with assurances that such measures were “temporary.” Unfortunately, they have proven to be anything but.

In the latest high-profile example, government mask mandates are making a comeback across the country — even for the fully vaccinated. And one only needs to look at the ongoing labor shortages across the country to remember that the supposedly “temporary” super-generous unemployment benefits first passed in March 2020 are still with us in dozens of states — albeit in somewhat reduced form.

Meanwhile, the Centers for Disease Control in early August renewed its sweeping and constitutionally suspect “eviction moratorium” prohibiting the eviction of nonpaying tenants in most circumstances. What started as a short-term measure meant to keep renters in their homes during the “15 days to slow the spread” campaign was expanded, renewed, and renewed again. It has only now come to an end after being struck down by the Supreme Court.

Similarly, the Biden administration has yet again extended the pause on federal student-loan payments, this time through January 31, 2022. What was initially a short-term respite has turned into a year-plus vacation from student-loan payments regardless of one’s need or financial situation. And now, some progressive lawmakers such as Representative Jamaal Bowman (D., N.Y.) want to expand pause into an outright cancellation of student debt.

That these programs continue to linger — and, indeed, slide toward permanence — is unfortunate yet unsurprising. Consider the incentives facing government employees and officials. Once a state agency fulfills its mission and declares, “Mission accomplished!” what happens next? In a well-functioning government, it would cease operations. Workers, executives, political appointees, and contractors would naturally lose dedicated income streams attendant to the project and seek new work. Established perks, benefits, and comfortable positions would all be lost — and regained, hopefully, in their next job.

Government employees — and the unions that represent them — then, have every incentive to keep their jobs alive, even if that requires not achieving their goals or forever expanding their mission.

The preservation of “temporary” power is similarly valuable for elected officials. Having more money to dole out, more access to distribute, and more favors to give helps politicians hold on to power and accrue allies for reelection. So, too, bigger government programs — regardless of their actual merits — give candidates up for reelection more to point to as proof that they are “making a difference.” This is why, with rare exceptions, politicians are loath to give up new powers once they have been handed to them, temporarily.

Milton Friedman hints at yet another reason why temporary government powers often prove permanent.  Following up his famous one-liner, he explains that such programs “establish an interested constituency that . . . lobbie[s] for their continuation.”

This is one of the main reasons that supposedly temporary measures such as mask mandates, super-charged unemployment benefits, and eviction moratoriums have stuck around. Each of these initiatives have created loud and powerful constituencies that clamor for their causes to be sustained. This includes public-health officials enjoying expanded relevance, unemployed individuals enjoying the expanded welfare payouts, millions of renters taking advantage of the moratoriums, and more.

Regardless of the merits of their decision, any government official who seeks to scale back these programs faces a tremendous potential backlash from the newly created interest groups. Meanwhile, the groups that suffer the consequences of these policies — say, taxpayers — are too broad, indirectly impacted, and dispersed to mount the same kind of pressure campaign.

This systemic flaw biases officials toward making the temporary permanent — and underlies Friedman’s theory. Yet we have more than theorizing and examples in the headlines to bear the late economist’s thesis out. A 2012 study found that for every dollar local governments accepted in grant money to “temporarily” expand programs, there was a 40 cent increase in permanent funding — a.k.a., taxes — over time.

Don’t expect things to play out differently this time. We’re likely to see much of the government’s expanded role in our lives and the economy linger long after the pandemic fades. Indeed, this reality — and Friedman’s timeless warning — are both worth remembering the next time we face big-government proposals that politicians promise are “only temporary.”

Peter Jacobsen is an economist, an assistant professor of economics at Ottawa University, and a fellow at the Foundation for Economic Education, where journalist Brad Polumbo is a policy correspondent.

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