Trump Can Help Poor Americans by Identifying Big-government Policies That Hurt

COMMENTARY Government Regulation

Trump Can Help Poor Americans by Identifying Big-government Policies That Hurt

Jul 11th, 2017 2 min read

Commentary By

Patrick Tyrrell

Research Coordinator

Daren Bakst

Research Fellow in Agricultural Policy

A high-profile effort to address harmful federal policies, such as through an interagency task force, would help dispel these myths. iStock

Key Takeaways

Here’s the reality: Big government often hinders Americans from getting ahead. And those it hurts most are the poor.

Across the federal government, policies drive up the costs for purchasing basic needs such as energy, food and housing.

A high-profile effort to address harmful federal policies, such as through an interagency task force, would help dispel these myths.

If all you have is a hammer, then everything looks like a nail. This certainly applies to big-government advocates who think the only way to promote economic opportunity and help the poor is through the hammer of big government.

But here’s the reality: Big government often hinders Americans from getting ahead. And those it hurts most are the poor.

Across the federal government, policies drive up the costs for purchasing basic needs such as energy, food and housing. It isn’t easy to get ahead when a large portion of your money is constantly going to meet basic needs.

These policies hit low-income households disproportionately hard because those families and individuals spend a greater share of their income than higher-income households on meeting basic needs. When federal policies artificially hike the costs of basic needs, these Americans are left with fewer dollars to save or invest in a brighter future for themselves and their families.

It doesn’t take much effort to find federal policies that punish the poor and deserve to be eliminated. The field of economic regulation is loaded with this type of rotten fruit.

For example, many federal energy policies impose major costs on consumers with little to no environmental benefits. Consider the Obama administration’s climate change regulations. They could drive up electricity bills by as much as 20 percent without changing global temperatures in any meaningful way.

Or consider the cost of putting food on the table. Federal food policies intentionally drive up prices, often to help big-business special interests.

The federal sugar program is a prime example. By intentionally restricting the supply of sugar, the federal government makes sugar more expensive. “Big Sugar” profits from this, but this hidden tax costs consumers an estimated $3.5 billion a year.

Or consider credit availability. Poorer Americans often have only one option for overcoming cash-flow problems to meet financial obligations: payday loans. However, the Consumer Financial Protection Bureau may make these short-term loans a thing of the past for many individuals.

By the CFPB’s own acknowledgment, its proposed payday lending rule could effectively destroy the payday lending industry, eliminating up to 85 percent of the loans currently made. For the more than 12 million people per year who use short-term loans, the majority are those who have emergency credit needs and lack other forms of credit.

These policies are just small samples of the many harmful federal policies that punish the poor. But they demonstrate why President Reagan was right when said that the nine most terrifying words in the English language are: “I’m from the government, and I’m here to help.”

If the federal government does want to help, then it should start by examining how it is hurting.

President Trump should lead this effort. Just as he created a special interagency task force on rural prosperity, so too should he establish a task force to identify federal policies that limit economic opportunity and hurt the poor.

The Trump administration could no doubt get rid of many harmful policies on its own. Other policy changes would require congressional action in the form of legislation. The task force could lay the groundwork for congressional action by documenting why the offending policies are unjustified and harmful, and the administration could then champion the effort to help enact the legislation.

For too long, big-government advocates have successfully perpetuated the duel myths that more government intervention equates with caring for the poor, and those who advocate for limited government and economic freedom are cold-hearted.

A high-profile effort to address harmful federal policies, such as through an interagency task force, would help dispel these myths. More important, its work would — if successful — eliminate numerous artificial barriers that keep millions from believing in, and achieving, the American dream.

This piece originally appeared in The Washington Times