What Does More Government Spending Do?

            Congress recently passed the Creating Helpful Incentives to Produce Semiconductors (CHIPS). The Senate passed the bill by a vote of 64-33 on July 27, and the House passed the bill by a vote of 243-187 the next day. President Joe Biden was set to sign the $280 billion bill today. According to Gillian Richards, the purpose for this legislation was “to boost American semiconductor chip manufacturers and combat the threat China poses to America’s national security.” 

            In her article at The Daily Signal, Richards reported on a discussion with Heritage Foundation President Kevin Roberts and President of the Intercollegiate Studies President John Burtka IV. The two men discussed “CHIPS and Science Act, family policy, and the trajectory of American conservatism.”

Throughout the discussion, Roberts stressed the practical importance of policy questions. Those aren’t mere political games, he said. When those on the left or right are too focused on winning a debate, they lose sight of the broader goal of public policy: namely, improving the lives of real Americans.

Roberts said that good intentions alone do not ensure good policy outcomes. Policymakers must keep in mind the Americans affected by their policies, as well as what’s politically possible, he explained.

He pointed to the CHIPS and Science Act as an example of a seemingly well-intended policy that will produce bad outcomes….

The measure aims to boost American semiconductor chip manufacturers and combat the threat China poses to America’s national security. Roberts said he views the Chinese Communist Party as a greater threat than the former Soviet Union was.

But the CHIPS and Science Act, Heritage’s president argued, simply would line the pockets of corporations that are its beneficiaries.

The conservative movement at its best focuses on the lives of real Americans, Heritage Foundation President Kevin Roberts said at the recent American Economic Forum in Washington.

“We have to get out of the habit of spending so much and expecting modern monetary theory and/or inflation to pay down debt,” Roberts said, adding that the national debt is an albatross around the neck of the typical American family….

“These chip companies, making tens of billions of dollars, don’t need our money,” Roberts said.

            Roberts suggested an alternative to the CHIPS and Science Act. In his pilot initiative, “legislators could find three of the poorest areas of the country that could support chip factories. It would involve a public-private partnership in which federal money would be sent with a clear and specific purpose to those localities.”

            When Burtka asked, “What causes inflation?” Roberts responded “government.” He cited other ways the federal government oversteps its bounds and stated that both the Trump administration and the Biden administration are partly to blame for the overspending by the government. Inflation is created by government overspending. Roberts stated, “We have to get out of the habit of spending so much and expecting modern monetary theory and/or inflation to pay down debt.”

            Roberts also said that those who make policies should “cut down on the overgrown safety net” because it “undermines human dignity.” The current welfare system should be reformed.