• Work and personal responsibility lead to prosperity, but the left increasingly favors programs that foster government dependency
  • The Biden administration peddles expansive programs that punish work and disrupt good incentives
  • These programs incentivize dependency and encourage workers to exchange liberty for handouts with strings attached

Government dependency that erodes personal responsibility is in opposition to the American Dream. The American Dream comes from work, risk-taking, personal sacrifice, and the pursuit of opportunities for oneself and one’s family. The antithesis, government dependency, is incredibly dangerous. It robs individuals of opportunity, real wealth, and progress. It trades personal responsibility for care, safety, or assistance, and it sacrifices a chosen job or career for a handout with strings attached.

Thomas Sowell explained the implications well: “Although the big word on the left is ‘compassion,’ the big agenda on the left is dependency. The more people who are dependent on government handouts, the more votes the left can depend on for an ever-expanding welfare state.”

Unfortunately, because our culture is already hooked on government dependency, progressive policies that feed into dependency can be quite popular. And dependent people are a reliable voting bloc.

Here are four ways the Biden administration feeds into the culture of dependency under the guise of compassion:

1. Bail Out Banks

The Silicon Valley Bank (SVB) collapse in March was the second-largest banking collapse in American history, leading investors of all banks again to worry about their bank deposits.

SVB held tech investments of the Silicon Valley elite. Most of those individuals were above the $250,000 threshold guaranteed by the Federal Deposit Insurance Corporation (FDIC). Depositors could have purchased private insurance after that to protect their investments. Even so, however, 94% of SVB’s deposits were uninsured. But it turns out the millionaire investors still received the benefit of insurance. The Department of the Treasury and the Federal Reserve changed the rules to cover them.

Banks are now able to assume almost any risk, at the cost of the American taxpayer.

The Federal Reserve, FDIC, Department of the Treasury, and President Biden claim that covering these deposits comes at no cost to the taxpayer, but that is false. The FDIC did not have sufficient funds to cover the SVB deposits. According to Heritage economist EJ Antoni, “The Fed can simply create the money to cover the losses at these failed banks, which will cause inflation, or the FDIC can do what they did in the last financial crisis and simply get the money from the Treasury, which is a direct cost to taxpayers.” This money is coming out of our pockets at a time we should be shoring up for a recession.

This action to “rescue” SVB tells depositors they need not do their own due diligence. It encourages irresponsible risk-taking, where the risk falls on the American taxpayer.

2. Socialize Mortgage Risk

Americans are struggling to buy homes. The supply of homes is quite low relative to demand, making homes very expensive. But if you take the responsible steps to become a reliable borrower, you will be punished under a new federal housing rule.

Changes to the loan level price adjustments will affect mortgages originating at private banks, effectively increasing monthly mortgage payments for most homebuyers.

Putting a hefty down payment on your home ensures you are buying a home you can afford. But under the new rule, those who make down payments of 15% to 20% will be charged the highest fees on their loans. The Wall Street Journal Editorial Board calls this rule “the socialization of risk” and claims it encourages housing market dysfunction.

Again, the Biden administration is telling you it is pointless to save for a home responsibly, most families’ largest investment. The action penalizes those with good credit.

A Mises Institute article underlines the problem with risk socialization well: “The redistribution of risk is as contemptible as the direct redistribution of wealth through taxation.”

3. Pay Americans Not to Work

The Biden administration has extended and expanded many welfare benefits, often in the name of the Covid-19 emergency. Unemployment insurance and Affordable Care Act (ACA) subsidies are particularly pricey. The Committee to Unleash Prosperity found that in more than half of our states, unemployment benefits and ACA subsidies exceed the value of the salary and benefits of the average firefighter, truck driver, machinist, or retail associate in those states.

Expansion of these benefits and more — food stamps, for example — has kept millions of Americans out of the workforce. These programs act as a tax on work, as people risk losing benefits if they take on a job.

Resistance to rejoining the workforce only increases as individuals delay reentry. Dependency begets more dependency.

4. Subsidize Student Loan Debt

After extending the student loan repayment pause multiple times, the Biden administration hopes to provide borrowers with up to $20,000 in debt forgiveness. This plan would effectively cancel $400 billion in student debt. The administration points to Covid as justification for this action, though the Supreme Court is likely to disagree.

According to Locke’s Brian Balfour, “The message millions of Americans are receiving is loud and clear: others will take care of your financial obligations and you’re a fool to delay gratification to save up to pay for something you desire.”

Again, those who sacrificed time, earnings, and other opportunities to go to college are essentially taught that this effort was in vain. Moreover, those who chose not to go to college, or who could not afford to, are also subsidizing this “forgiveness.” This action would also be highly inflationary, a burden borne by all, with disproportionate harm to the poor.

The left takes aim at work and personal responsibility in many ways, and this list is not exhaustive. Each of these actions comes at a cost to the American taxpayer. Though peddled as free, these initiatives are costly and burdensome to hard-working Americans. These policies incentivize dependency while disincentivizing work.

Politics is downstream from culture, as Andrew Breitbart famously said. The Biden administration keeps feeding a culture of dependency.