Why federalism is our friend

Well, forgive me for whistling past the graveyard. We all have our way of dealing with stress, and mine is to make fun of what scares me. So naturally, I’m finding no shortage of dark humor in Washington DC’s most recent assessment of our battle against the coronavirus.

In the classic fashion of Washington DC mathematics, it would appear that we are on a winning streak. In DC, if an agency budget scheduled for a 6% increase is, by way of congressional action, modified to only receive a 4% increase, that is what’s known as a “tax cut.” Should we be surprised that when we are told that fatalities associated with the virus are “leveling off,” that we are winning? Granted, we aren’t dying less, but we aren’t dying more either. It’s one of those half-glass-of-water things.

While I’m not in the mood for celebration just yet, I am, of course, thankful for the sacrifices of all of those unsung heroes in the essential services. The public and news media have rightfully praised the professionalism of medical personnel and first responders who continue to help people despite personal risk to themselves. Truckers, food workers and corrections staff are also receiving well-deserved thanks.

We do indeed appreciate them all, and while paying respects to those individuals, let’s please not forget workers in the utility sector. I am personally grateful for having to be quarantined in a home supplied with adequate water, electricity and natural gas. As maddening as stay-at-home orders can be, doing so with climate control, internet service and light to read by is indeed a blessing. Hats off to the utilities for making this whole thing bearable.

On a slightly different note, I would like to just take a quick moment to touch on Federalism. Why Federalism? Well, I don’t know that I have ever appreciated the value of a Federal Government as I do now, or as I believe we all soon will.

Like everyone, I was taught that our first try at government, under the Articles of Con-Federation (1781-1789) was a disaster. I also knew that people in the south, who were partial to banjo music, scrapple and owning human beings as property, sought to form a Con-Federate government. The Articles of Confederation failed because, as a result of having suffered as a client state of the British Empire, the founders designed a central government that had so little power that it was ineffective. The Confederate government of the south had been built upon a promise of state’s rights that they felt were being denied to them under the constitution, specifically, the ownership of people.

So from that, we can gather that if Con-Federalism is bad, Federalism must be good, right? Well, not always, but recently it has been looking better to me.

Along with North Dakota, Iowa and Arkansas, our state of Nebraska has been singled out for criticism by select media and elected officials for our resistance to the most draconian of the safety precautions being undertaken by more densely populated states. When asked if those regulations should be forced upon us by the central government, the administration replied with a firm “no.” Precautionary measures were recommended, but would not be mandated.

On its own, that’s not a big deal (and we are, in fact, complying with the vast majority of the recommendations), but it is exemplary of some larger principles and practices in place and promises to play a pivotal role in the outcome of the current economic crisis.

As a result of these many business shutdowns and stay-at-home orders, our economy is shin-deep in mud. Under our Constitution, the Federal Government reserves as one its exclusive rights, the ability to print money. In their role as what economists call, the “consumer of last resort,” the Federal Government is able to provide immediate, stimulative relief to individuals and businesses that we, as a state, would be unable to provide. There will be plenty of time to debate the merits of that strategy in years to come. At $2.2 trillion and growing, I am personally concerned about the value of the dollar slipping and runaway inflation, but most economists agree that the outcomes will be positive in the short term. But here’s the twist. Even though the fatalities are just now “leveling off,” and successive returns of the virus are likely, Americans are itching to get out. Homeschooling and game shows are nice, and out of respect for our neighbors, we will continue to comply with requests for social distancing as long as necessary, but we want to work. We want to be productive and we want our economy to get back on track. We want light at the end of this tunnel.

One radio talk-show this week pointed out the fact that unlike the Federal Government, which has a high tolerance for deficit spending, State Governments don’t have that ability. Most states, by and large, balance their budgets annually, and several are required to do so by their state constitutions. Since balanced budgets require the collection of taxes and the collection of taxes relies on a robust economy, the states are facing a genuine problem. That thought stayed with me the rest of the day, and after a bit of reflection, what looked like a problem, began to resemble a solution. Like it or not, the central government may spend us out of trouble in the short run, but I have every reason to believe that it will be the states that, when appropriate, will be the catalyst for a return to business as usual. Just as our state government is able to choose only safety precautions that are appropriate for our state, they can also remove them. The Federal Government will get us through this.

My prediction is that the State Government will get us out of it. As the Orange Man would say, we will see what happens.