Vice President Kamala Harris’ recent warning to Central American migrants – “Do not come” – suggests the current administration endorses the same wrongheaded approach to immigration as previous administrations.

Immigration is not a drain on the resources of the receiving country. Rather, immigration generates economic growth, entrepreneurship, and other benefits. Research has found immigration to have both positive and negative fiscal effects depending on underlying assumptions; plus fears of negative effects can be addressed by requiring legal immigrants to wait significant periods before benefit eligibility. Indeed, many large federal programs, including Medicaid, SSI, and SNAP, already impose waiting periods on immigrants. Beyond this, research shows that immigrants use welfare and entitlement programs at lower rates than citizens.

In an effort to reduce migration at lawful ports of entry, the Biden administration plans to spend $4 billion on aid to Central America to induce would-be migrants to stay put. Research suggests, however, that foreign aid has little effect on economic growth in low-income countries and may lead to increased emigration from aid-receiving countries.

Instead, one way the U.S. can reduce the flow of migrants is by legalizing drugs, a policy change that makes sense independent of immigration. Increases in homicides are linked to increases in apprehensions of unaccompanied children at the border, and legalizing drugs would eliminate violence from the drug trade, thus creating a safer environment in countries that currently send many immigrants to the United States.

Preventing the free movement of people violates the principles upon which United States was founded. It is possible to preserve national security while encouraging immigration that promotes economic growth. But this requires a welcome mat, not a “do not enter” sign.

Today, the Biden administration released its National Strategy for Countering Domestic Terrorism. It’s loaded with proposals based (so it seems) on premises that have been discredited or attacked when applied to various ethnic or religious minorities during the “War on Terror” era, such as the FBI’s infamous “Don’t Be A Puppet” website with its anti-Muslim stereotypes and tropes.

It’s hard to imagine how the FBI and DHS could possibly provide more information to their state, local and tribal law enforcement counterparts, but that is one of the major areas of emphasis in the administration’s new approach:

Additionally, a comprehensive understanding of the domestic terrorism threat landscape requires facilitating a systematic provision of information and data to the appropriate parts of the Federal Government from state, local, tribal, and territorial partners who often identify and disrupt manifestations of the domestic terrorism threat, even if they do not always use the same labels to describe it. (pp. 15–16)(emphasis added).

That last line should trouble everyone.

Exactly who in the government (at any level) will decide who constitutes an “extremist” or what constitutes an “extremist view”? If terminology–and thus standards–vary between levels of government, crafting anything approaching a coherent, legally sustainable policy in this area becomes problematic at best.

Clearly, hateful speech attacking people of color or others on the basis of their religion, gender status, and the like is repugnant and should be condemned by all people of good will. But the Supreme Court long ago ruled that even the most vile speech is protected speech unless it is “directed at inciting or producing imminent lawless action” and it is “likely to incite or produce such action.” Biden’s approach seems potentially ripe for First Amendment challenges if implemented in ways that clearly contravene the Brandenburg standard.

The Biden approach also calls for “making appropriate use of the analysis performed by entities outside the government” by introducing “a new systematic approach for utilizing pertinent external, non–governmental analysis and information that will provide enhanced situational awareness of today’s domestic terrorism threat.” (p. 16)

Does that mean buying still more surveillance-relevant information from data brokers, a practice that Senator Ron Wyden (D‑OR) is trying to prohibit?

Concrete, specific threat information is what’s required to stop any violent criminal conspiracy. The FBI had that in the ongoing Wolverine Watchmen case in Michigan, which is why the plot to kidnap (and possibly kill) Governor Gretchen Whitmer was foiled. So did the Nashville Police prior to the 2020 Christmas Day bombing, but they failed to act aggressively on the credible tip from the bomber’s girlfriend. Sending taxpayers a bill for reams of information aggregated and sold to law enforcement organizations will only add to the data overload problem, not help find actual violent actors.

The President’s domestic terrorism strategy has other proposals that appear to represent a clear threat to First Amendment-protected online speech:

…it is equally important that the Federal Government engage in efforts to prevent individuals from being drawn into the grip of domestic terrorism in the first instance. That means reducing both supply and demand of recruitment materials by limiting widespread availability online and bolstering resilience to it by those who nonetheless encounter it, among other measures. (p. 19)

Does “limiting widespread availability online” mean gutting Section 230 of the Communications Decency Act? And given the distributed nature of the internet, exactly how would federal, state, and local authorities limit “widespread availability online”?

The strategy also places gun control back in the spotlight:

It also means reducing access to assault weapons and high–capacity magazines and enforcing legal prohibitions that keep firearms out of dangerous hands. (p. 19)

The most radical incident of domestic terrorism in U.S. history involved a truck bomb used against the Murrah federal building in Oklahoma City on April 19, 1995. Al Qaeda used hijacked aircraft as flying bombs to destroy the World Trade Center and severely damage the Pentagon on September 11, 2001. One far-right extremist simply used his car to run over counter-protestors in Charlottesville, Virginia in 2017, killing one and injuring many more.

There’s no question that preventing known criminals from getting guns is an appropriate focus for public safety professionals. But given the multitude of ways of engaging in acts of violence, we should be cautious about proposals that elevate one type of threat above even more lethal, truly mass-casualty causing technologies, old or new.

We should also be skeptical of government claims that its agents and officials can tell themselves, much less us, that they have a magic formula for predicting who will become the next Timothy McVeigh:

Additionally, the National Counterterrorism Center, Federal Bureau of Investigation, and Department of Homeland Security will release publicly a new edition of the Federal Government’s Mobilization Indicators booklet that will include for the first time potential indicators of domestic terrorism–related mobilization. (p. 21)

As the Brennan Center has noted, there is no, published, peer-reviewed data demonstrating “a discernible process of radicalization that results in terrorist violence.” Simply stated, the Biden administration is re-imagining a counterterrorism approach that has long since been discredited.

In the aftermath of a violent national trauma, there is a predictable political impulse by House and Senate members to “do something” in response. That’s understandable. But the point should be to “do something that makes sense”. The Biden approach does not, particularly when compared to the declassified domestic terrorism assessment it cites as justification for its massive new program:

The IC assesses that lone offenders or small cells of DVEs adhering to a diverse set of violent extremist ideologies are more likely to carry out violent attacks in the Homeland than organizations that allegedly advocate a DVE ideology. DVE attackers often radicalize independently by consuming violent extremist material online and mobilize without direction from a violent extremist organization, making detection and disruption difficult. (p. 10)

This particular paragraph speaks to the very real challenge law enforcement faces in trying to prevent any kind of terrorist act. And as history clearly shows, membership in a given domestic group may, or may not, necessarily be indicative of someone representing a confirmed threat. 

Expecting police to prevent every possible violent incident on American soil is a form of magical thinking. Expecting them to act on specific, credible information on particular known or suspected violent individuals should be the standard by which we shape our approach to preventing another Oklahoma City bombing or an attempted insurrection.

Until recently, conventional wisdom had it that the Republicans were the party of free trade while the Democrats were more inclined towards protectionism. There were always gaping holes in this characterization, as we never came close to free trade when the Republicans had power, and Democratic presidents often pursued a bit of trade liberalization. But it was probably fair to say that, on average, Republican politicians were more sympathetic to free trade than Democratic politicians were.

Is that all about to change? Are the parties switching places on trade? Consider this from a recent Washington Post article:

Republicans’ populist turn, breaking with the party’s laissez-faire past, has its roots in the last administration. Though he boasted of loosening regulations, Trump wielded federal powers to pick winners and losers throughout the economy.

He ordered power plants to purchase energy from uncompetitive coal and nuclear plants and let the Commerce Department choose which companies could avoid costly tariffs on industrial metals.

He also attacked companies, such as Amazon, General Motors and Harley Davidson for their business practices, including factory locations. (Amazon founder Jeff Bezos owns The Washington Post.)

“The real fault line was trade. The party of free trade based in the suburbs became the party of quotas, tariffs and industrial policy based in rural America,” said Chris Krueger, a strategist with Cowen Washington Research Group. “It just flipped on its head.”

Trump definitely flipped a lot of things on their head. But it’s worth noting that Trump’s views didn’t come out of nowhere in the Republican Party. Back in 1992, Pat Buchanan ran for the GOP presidential nomination on a platform that mirrored Trump’s anti-trade (and anti-immigration) rhetoric, and he generated a fair amount of support. To paraphrase George Will, some people might even say that it took 24 years to count the votes from that GOP election, and Buchanan won.

But is this a permanent shift in the dominant view of trade within the Republican Party? Or are we just in the midst of a personality cult that will fade soon?

It will probably take a few more election cycles to be sure. My instinct, though, is that we are likely to go back to something like the recent historical norm, with Republicans pushing (albeit modestly) for freer trade, and the Democrats controlled by their protectionist interest groups and politicians. There’s only so much mileage you can get out of trade as an issue when many polls show it’s not something voters care that much about. As my colleague Scott Lincicome summarized the polling on trade policy back in 2018:

recent public opinion polling uniformly reveals that, first, foreign trade and globalization are generally popular, and in fact more popular today than at any point in recent history; second, a substantial portion of the American electorate has no strong views on U.S. trade policy or trade agreements; third, and likely due to the previous point, polls on trade fluctuate based on partisanship or the state of the U.S. economy; and, fourth, Americans’ views on specific trade policies often shift depending on question wording, especially when the actual costs of protectionism are mentioned.

Recent polling done during the pandemic confirms some of these trends, with the economic uncertainty seeming to lead to a modest increase in trade skepticism, although support is still at historically high levels. Republican support for trade has dropped over the last several years, but there is still a significant bloc within the party that is pro-trade.

Pat Buchanan was passionate about these issues, but he didn’t have the personality to take his protectionist positions very far: He could rile up his base but couldn’t bring additional Republican voters over to his side. It would be surprising if some of the other leaders (e.g. Josh Hawley) of this wing of the Republican party could do so either. But there should be no doubt they are going to keep up the effort, so Republicans who believe in free markets, competition, and openness will have to fight hard on these issues for the foreseeable future.

The joint federal-state unemployment insurance program (“UI program”) provides benefits to Americans who are out of work. States design and operate their own programs, subject to federal oversight by the Labor Department. In normal times, UI benefits are funded primarily by state employer taxes, while the federal government pays for administrative costs. In response to the pandemic, however, Congress significantly expanded the program’s coverage and benefits, including supplemental payments of $600 per week (subsequently adjusted to $300/​week). For all intents and purposes, Congress wrote a blank check, appropriating “such sums as the Secretary of Labor estimates to be necessary.” As of Jan. 2, 2021, states had drawn down a total of $392 billion from the expanded UI program; the Labor Department currently estimates that the program’s ultimate cost will exceed $873 billion.

Historically, the UI program has ranked among the worst performing in government. It is an annual presence on the Office of Management & Budget’s “high-priority” list of programs that unduly risk taxpayer money due to mismanagement. Last June, for example, the Office of the Inspector General told Congress that, [t]he Department has estimated that about 10% of UI payments are improper under the best of times, and we are in the worst of times.” Two weeks ago, the Inspector General warned that the overpayment rate for the pandemic UI program will be “much higher” than 10 percent. (My colleague Ryan Bourne discussed this report in a recent post).

How much higher?

In early 2021, California—the state with by far the largest UI program—told the Labor Department that it believes its improper payments could be as high as 27%. More recently, the Associated Press reported that states were “overwhelmed” by fraud. And yesterday morning, Axios reported that “criminals may have stolen as much as half of the unemployment benefits the U.S. has been pumping out over the past year, some experts say.”

No matter what, the taxpayer liability will be astronomical. The only thing we know for sure is that the improper payment rate will be “much higher” than 10 percent of an estimated $873 billion in federal payments. If, for example, California’s suspected rate (27%) applied writ large, then about $236 billion of taxpayer money would be wasted.

What happened? According to the Inspector General, “States did not perform required and recommended improper payment detection and recovery activities.” And why didn’t states do their due diligence? Of course, their increased workload was a major factor. Moral hazard, too—states were mostly spending federal money. And the Labor Department obviously failed to provide ongoing oversight. But the foremost factor identified by the Inspector General is the states’ “antiquated IT systems.”

In sum, UI fraud was rampant because many states failed to check for fraud, which was a failure due primarily to these states’ inadequate information technology.

Alas, there’s more to the backstory. The UI program became stressed during the last crisis—the Great Recession—and Congress threw money at the problem. That is, the American Reinvestment and Recovery Act of 2009 provided $7 billion that states could use to modernize their IT systems. However, an Inspector General audit in 2010 found that about half the money went directly to benefits or was left unused. So the modernization effort flamed out.

The upshot is that there’s plenty of blame to go around when it comes to the eye-popping waste involved with the pandemic UI program. For 14 of the last 17 years, the reported improper payment estimate for the regular UI program has been above 10 percent, so the program’s poor performance was no secret. During the last crisis, Congress authorized billions of dollars for a fix, but lawmakers never followed through, and the Labor Department dithered while the fix fizzled in the states. As a result, states have been incapable of responsibly stewarding almost a trillion dollars in UI benefits during the pandemic, and the taxpayer is on the hook for egregious losses.

Catherine Rampell of the Washington Post wonders why President Biden has not repealed President Trump’s costly tariffs on imported steel and aluminum from “our close economic and military allies, including the European Union, Canada and Japan.” If both the United States and our allies recognize the damage these trade barriers are doing, what are the obstacles to removing them?

For one, the stakeholders that benefit from the tariffs — the steel sector — are lobbying to keep the trade restrictions. It’s a “political inertia problem,” says Cato Institute senior fellow Scott Lincicome, because the tariffs have created a constituency that depends on them, and removing the restrictions could cause the industry some near-term pain.

That’s a problem for economic reformers everywhere. Every tariff, subsidy, regulation, mandate, or other government program creates winners and losers. In most cases, a small number of winners, with the losses spread almost invisibly across the whole society. Economists call it concentrated benefits and diffuse costs. The tariff benefits domestic steel producers and unions, and the costs are spread out over everyone who buys products made with steel or aluminum. Which group is aware and engaged in the debate over the issue? Obviously the steel companies.

It’s not just tariffs. The farm program benefits some farmers and agribusinesses handsomely, with costs spread across all the taxpayers and food buyers. Every new entitlement program has beneficiaries who are well aware of their benefits, while the costs are buried somewhere in the vast federal budget that no taxpayer can comprehend. 

This is why advocates of small government are so concerned to block new tariffs, subsidies, regulations, mandates, and entitlements. Each one will create a new constituency that will tenaciously fight to keep it. Even a tariff that harms U.S. allies, imposed in a fit of pique by a president now rejected by the voters, has beneficiaries who organize and lobby Congress and the administration not to remove their protection.

Last Friday, President Biden unveiled his $6 trillion budget proposal. Under his plan, government spending will rise to levels not seen since World War II. Large investments in climate change, transportation, and education headline the proposal.

“Build back better” has been a common refrain of the Biden administration. The COVID-19 pandemic crashed much of the economy, but with increasing vaccination rates and recent promising jobs reports it appears that America is ready to reopen.

The federal government can encourage economic growth; mainly, however, this involves doing less, not more.

To encourage entrepreneurship, the administration should focus on reducing regulatory barriers for startups. To enhance competition and give U.S. firms the best access to innovation, the administration should slash tariffs on products that are critical to key U.S. industries (absurdly, the opposite is happening). To encourage innovation in technology, the federal government can eliminate visa caps and onerous barriers for high-skill foreign workers. And lawmakers should abandon efforts to impose a higher federal minimum wage, so businesses can offer fair market wages commensurate with their particular region.

The best way to encourage economic growth is to remove government barriers. The U.S. economy is recovering. The question is how much an overexuberant expansion of federal policy will slow it down.

The Biden administration has released its federal budget for 2022, which envisions a large increase in the size of government. As the pandemic recedes and economic growth resumes, policymakers should be paring back spending and deficits to normal levels. Unfortunately, the Biden spending plan risks following last year’s crisis with a new fiscal crisis as it tries to sustain spending and borrowing at dangerously high levels.

The chart below shows federal spending and revenues as a percent of gross domestic product. Federal spending trended up from 17.7 percent under President Clinton in 2000 to 21.0 percent under President Trump in 2019. Spending jumped to 31.2 percent in 2020 with the pandemic, which was higher than the 24.4 percent peak reached during the Great Recession. Pandemic-related spending is expected to decline the next few years, but Biden is proposing that overall spending and deficits remain at substantially heightened levels.

The Biden budget shows federal debt held by the public rising from 100 percent of GDP in 2020 to 117 percent by 2031. We are not at war, and yet that level of debt is higher than the 31 percent reached in the Civil War, 33 percent reached in World War I, and 106 percent reached in World War II.

Regarding the budget, Treasury Secretary Janet Yellen said, “I believe it is a fiscally responsible program.” Let’s scale the budget figures to family size to see how off-base that claim is. Biden proposes to spend $7.2 trillion this year relying on $3.7 trillion in borrowing, and he proposes to push up accumulated debt from $24 trillion this year to $39 trillion by 2031. That is like a family spending $72,000 this year putting $37,000 on credit cards, and then pushing up family debt from $240,000 to $390,000 as it continues spending more than it earns. Would any financial advisor tell the family that was responsible?

Yellen is apparently trusting administration forecasts that interest rates will remain low such that rising federal debt does not explode budget costs. But macroeconomic forecasting is a terribly inaccurate art. In January 2008, for example, the CBO projected strong and rising economic growth, oblivious that a deep recession had already begun. Nobody knows where interest rates, inflation, and growth will be in coming years, so the responsible thing would be to cut debt now while the economy is growing to help avert a financial crisis down the road if things don’t go as planned.

The administration may think that its new social and infrastructure spending is important, but there is no reason why any of it should be done at the federal level. State legislatures are entirely capable of spending more on everything from highways to paid family leave, if that is what their residents want. Besides, the federal government is already overloaded with more than 2,300 mismanaged subsidy and benefit programs, and there is no way that Congress could properly oversee all the new programs that Biden wants to create.