JD Vance’s Doomed Plan for Family Planning

Welcome back to Radio Rothbart. I'm Ryan McMan, editor-inchief at the Mises Institute. And joining me today for our discussion on the economics of the family and attempts to subsidize the family and child rearing and a variety of related topics. On that, I've got Jeffrey Degar joining us today. Now, Jeffrey's been on with us in the past uh on similar topics and uh he's a he's a fellow at the Mises Institute. I've certainly met him down there when he's done some research there. He's a research fellow at the American Institute for Economic Research and he's a senior fellow for free enterprise at Cornerstone University in Grand Rapids. Now, the reason I wanted you on this time, Jeffrey, is in recent days, JD Vance has been out there saying that he he wants a new essentially welfare program for parents to get checks from the government for raising kids. And uh it looks like he wants $9,000 payments. I'm not sure how regularly those payments out. So, let me just throw it over to you to get just some of the basic details here. I don't even think the details matter that much for our discussion of of this sort of thing because I don't obviously this isn't going to be implemented in any way that he's laying out right now. But, uh, yeah, just kind of give us bring us up to speed on what JD Vance is saying these days in terms of let's pay people to be parents. >> Well, thanks for having me, Ryan. We always appreciate talking with you and I think this is a political case of what is good for the goose is good for the gander. In other words, uh JD Vance and uh the right have discovered that bribery via campaign promises uh might be effective. They're seeing all kinds of promises being made by folks on the left. Uh for example, here in Michigan, we have a Senate candidate Abdul als promising uh the wonderful medical utopia of Medicare for all, right? And this is gaining him some traction, right? So promises of welfare delivery by the left, uh that's nothing new. And it seems that the right has decided to get into the game all in the name of preserving the family, the foundation of society. Yeah. But uh of course when we yield power to the state to make decisions in the household then that foundation is a little more shaky shall we say. >> Well so the details are really scant right. Uh this is more of a political trial balloon. Let's throw this out there and see uh how the electorate responds. And within the right it's been interesting to see uh some push back. Even Governor Dantis in Florida stepped into this into the fray on this discussion and said, "Hey, look, this is probably something the federal government can't afford for one, and for another, it will tend to be inflationary for the goods and services that these households would be purchasing. uh be it diapers, be it health care, be it child care, uh whatever these households decide to make their purchases with that $9,000 that uh I think is never going to arrive. But that's sort of the tra balloon that was floated and I don't think it's going anywhere and it was actually a little bit of a divisive issue on the right. >> Well, and of course you're right that this is basically just a uh [laughter] pay for votes sort of scheme, right? It was just the other day that Trump's out there saying, "Well, if I if you return the Republicans to uh power in this next election, I'll give every voter $5,000." >> And it's just, "Hey, vote for me and you get free money." This is, of course, what Democrats have been doing for decades, and Republicans were complaining about it. So, I guess they just figured out, hey, let's do the exact same thing. Now, this has been recommended for years by certain cynical Republican apparatics. um where they just say we need to build a new right-wing coalition and what's this coalition going to be built on? It's just going to be built on more welfare. That was that was the brilliant idea that uh some of these people were claiming would build a new form of conservatism. So, this just seems to be the the latest >> step for that. So, there's a couple of things here then >> that need to be said, right? I suppose we we can't just can't just roll past this idea of why are certain conservatives so committed to this idea of paying people to have children or paying people to stay home? Like what are they saying? What what is the reason for this? >> Well, I think that it really starts with what is broadly understood throughout the West as what some people are calling the fertility crisis, right? uh statistically speaking we have this number of 2.1 children per woman in her lifetime and that is what we call the replacement rate and numerous nations across the west have fertility rates that are below and some well below replacement and that is really the starting point for concern for a lot of conservatives now let's think about your average conservative voter in the United States they are big supporters of the social security system. And so the implications for a falling birth rate are that you are going to have fewer workers to subsidize what is really a wealth transfer from the young to the old. And so there's a fiscal implication for this uh even as we speak. So that's one thing that conservatives have rallied around asking the question, how are we going going to fund social security unless people start having more kids? And so that's one place to start. Um but the other is that uh and it's a reality throughout um the rest of the developed world, let's say, that they also have lower than replacement fertility rates. And I've made the argument um and others have as well that part of the reason for that is because families are coming up and and trying to form under a really inflationary environment which requires two incomes to get by. That's not just true in the United States, but it's true throughout the Western world. And so, uh if both mom and dad are working, uh that has some implications for the number of children you'll have and the ability to care for them. So, uh, the next step for conservatives has been to say, "Oh, well, that's simple. Let's just go ahead and subsidize, uh, mothers to stay at home with $9,000." Never mind that they might forego, uh, you know, five or tfold that kind of income in the workplace. And so, the numbers, uh, the math isn't mathing here. uh especially when you look at what is spent on what's uh what's called the administration for children and families. Um it's the child care subsidy that goes to by and large uh single mothers and the math around this is a little bit uh little bit shaky. There are a lot of kids that are eligible for this that don't receive the benefit for various reasons. Uh, and as it averages out for young children, that subsidy comes to about $8,000 a year, but as children get older, then that subsidy starts to uh be whittleled down. So, the idea that every stay-at-home parent is going to get $9,000 perhaps even per child uh would would cause an explosion in welfare spending under this kind of plan as compared to what it is right now which is already out of hand. And so, uh that's kind of the motive from what's coming for the right. But, uh the math isn't mathing as I said. >> Well, and of course, I suppose why does the federal government have to be in charge of it? It seems that the first question everyone should ask is why not the state government have them do it if it's so important. But it seems it's just so funny to me that Republicans, which for decades we're talking about local control and decentralization and all of that stuff that has been so thrown out the window >> in the last 10 or 12 years. Now every good thing, everything they say is good must immediately start at the federal level and must involve trillions in federal spending. and this is just what everybody should do. And I I remember conservatives going on TV and talking about how we need new federal program um for um parental leave and they were they were going to have the feds administer that and so everything's a federal program now. >> And I I mean I'm not naive. I get why they're they want to do it politically. But as you say, right, the country being $40 trillion dollar in debt, looking at interest rates heading up on federal debt, and then just saying, "Oh, we'll just spend an extra trillion dollars." Cuz that's what we are looking at. If you were to implement a program like that, you're looking at trillion or more dollars >> being spent. This isn't some minor program. It would just be huge. >> And >> yeah. Well, and uh even this past weekend, we mentioned that the president himself came out and promised a $5,000 uh you know, $5,000 windfall for every American adult if the if the Republicans win uh the midterms. And some Republicans came out and said, "Well, little back of the envelope math says that that's an additional $1.2 trillion in spending when we're already running these massive deficits." And so that's another one of the details on both of these proposals. The one that Vance floated and the one that uh the president has floated and that is where's the money come from? Of course, Rothbart told us look if government is going to finance any activity, it's either going to come from current taxpayers. It's going to come from second option more borrowing or third more printing. And so in either of these cases, there are serious downsides to uh the average American household uh under all those conditions. So I think that maybe a smarter thing for Vance would have been to say uh instead of a $9,000 stay-at-home subsidy, how about just a $9,000 tax break for every household in America? Like this would be quite appealing and it would appeal to the base. But again, I think you're seeing in the right and Vance and Patrick Den and other people like this uh the, you know, seizing power, right? Because this is a power play is what it is. Seizing power, using the levers of government, using the treasury, using the taxpayers dollars to win political favors among their constituents. And so I think this is both of these are naked examples of this. And as you said, the left's been doing it for years, but now the right is finally getting into the game. and uh a little more clumsily, I think, than the left. They're a little more crafty about it, but uh I think that's what we're seeing here. >> And of course, when you're already running huge deficits, uh crafting a program like this out of tax cuts doesn't work either because then how do you make up for that loss tax revenue? They just print the money. They just get it through >> borrowing and inflation. And so now you're just then fleecing the general public through the inflation tax rather than just through a direct tax. So when you are already a deficit centered country, tax cuts really just mean taxation through inflation rather than just more traditional taxation, which I would argue is actually the if you're going to tax people, just be honest about it and tax them through actual taxes rather than running huge deficits and taxing them through inflation, which as you've pointed out then ruins families in its own way just as much as higher taxes would in the traditional way. >> Yeah. >> Now, >> yeah, it sure does. >> Looking at a program like this, the question has to be asked, would it make any difference? So, the assumption here is that well, if we give people money, if we subsidize families, then they'll have more children. And they'll point some people will say, gee, if only health care wasn't so expensive, people would have more children. If only there was a more generous welfare state and people felt more secure economically, people would have more children. But that's so easily disproven, all we have to do is look at Europe, right? Generally speaking, and and I'm going to ask you about specific cases here in a second, but generally speaking, we can already see that that doesn't work cuz we could point to pretty much every European welfare state, which has government healthcare and all sorts of other government programs, and they have worse birth rates than the United States, where supposedly we're all just under grinding poverty because family life is so expensive, and it's so carefree in Europe. So, why are the Europeans having virtually no children? So, we also know then, and I'll let you go into this, that there are specific programs that the Europeans have done specifically targeted toward having children and increasing family size, and it seems like those aren't working either. Right. >> That's right. They're falling flat. And there's there's a number of different cases. So if we think um start in the northeast of Europe, you think of the Scandinavian nations and the generous benefits given for um uh maternity leave and paternity leave, uh stateup supported child care, these kinds of things that are supposed to make family life uh easier and less expensive for couples that have uh new children on board. uh they have some of the lowest fertility rates in the world and that has not changed once these programs were introduced. In fact, those programs uh have a negative correlation to fertility. So fert fertility has continued to fall even with those programs present. uh if you shift your attention eastward to Hungary, one of the big incentives there was to provide uh a lifetime of income tax relief for mothers who had I can't remember if it was three or four children but once you had a certain number then uh you'd be tax-free for the remainder of your life. That too fell flat. One of the reasons there is that it had such a a future orientation and it failed to recognize the current costs associated with having children. And so I think that you've got two examples there. Um and I guess a third if you want to go around the globe here uh is to look at uh say Japan or South Korea. South Korea especially has spent uh in fact billions of US dollars trying to subsidize fertility and the same as in Scandinavia they have seen fertility rates fall with those programs in place in the long run. What typically happens uh in those cases is that you get an immediate like shortterm response. you know, the the statisticians get in there and say, "Oo, there was this little bump in fertility, but it is always short-lived. It is always a very small change." And the long run trend continues because of a lot of the economic factors that we've that we've mentioned. And um uh our our friend and colleague um uh Katherine Pelock who gave a really nice talk at AERC this last year. She had another paper at one point and she called this naive Malthusian thinking because the Malthusian model says that if you put resources into the household then you'll get more babies. But that is really a naive view of what's happening in the developed uh financialized world that we're living in. And so uh I think for those reasons u those are just the beginning reasons why these programs fail to deliver on fertility increases. >> Well, it's just it's it smells so much of central planning, right? is, oh, we can we can craft these policies that that will incentivize people to have more children, and lo and behold, it doesn't work. Maybe it's just that what people believe, what their values are has more important uh and a greater emphasis on uh what people do in their families than just the ledger and how much government money you're getting because there is tremendous cost right now with having children. But there's always been tremendous cost if you think about it in terms of how much you're giving up by having children. And now when I say this, I'm saying the exact same things that like a lot of left-wing like ultra feminists say, right? It's like, oh, you give up so much when you have children. >> Uh but materially speaking, you absolutely do, right? in terms of how much can you save in terms of money. How much do you >> have to spend on your children and there's there's a lot and there's big bills. I got kids in college right now. It's big bills. So, and there's no denying this. >> So, the only way you would possibly be motivated to have children is if you felt there was some sort of non-monetary benefit of it >> that was significant. And this stems from religious beliefs, philosophy, the culture you come from, your view of family. Do you hate your parents? Right? Did you hate your own family life? Uh do you think it's a a happy family is even possible? All of these sorts of things are going to affect a person's decision to have children. And the idea that oh well you'll get a few more thousand bucks a year is going to fundamentally change especially since there's no guarantee that that program would last uh for any significant period of time. It's hard to really argue >> right that that would be a big determination there and I think that's then playing out where we just look across the globe and we see yeah there's so much money being shoveled at families yet people aren't having more children. >> Yeah. Well, and I think what you're pointing to there uh is something that I mentioned in an article uh with Civotas outlook. It was I entitled it to social engineers of all parties. Uh and it was kind of a play on Hayek's uh Hayek's introduction the road to surfom where he addressed it to socialists of all parties. Uh but this is like you know family engineering. Well, what what's happening here of course is central planning by the state and uh there is a u uh now um recently passed um British thinker Roger Scrutin and he had an article a number of years before he passed that talked about the state sponsored culture and he made the argument and I think it's by and large correct that when you have family life that is continually invaded by state intervention. That that breeds what he called a state sponsored culture where we look to the state for relief. We look to the state for education. We look to the state for you fill in the blank. And he argued that children who learn that pattern of life and that way of thinking that they are fundamentally incapable of growing into adults who understand what it means to be a free citizen uh a free person and to grow local institutions. Uh so one of the things that we've seen with the rise of the inflation culture or the state sponsored culture is the erosion of religious organization organizations, civic organizations of various kinds, mutual aid societies. These have all been eroded due to the infiltration of state sponsored culture. And so it's no wonder then that that households uh struggle to grow and to plan for the future in a way that really serves the household rather than serving the state or looking to the state for what we might call human flourishing. And so I think that's um that is another key cause of what we're seeing throughout the developed world right now. Well, and I've written too on the idea of how do you fight the state uh through other non-state institutions, right? This is often the question we get from our readers and from our supporters is well, what should we do? Right? Electing people doesn't seem to work. And I make the point you make is that what held the state in check for so many centuries was the strength of non-state institutions. And the state systematically destroyed those institutions every chance it got. And this wasn't just some accidental thing that happened. Those other institutions, the local institutions, remember the key component of growing state power is centralization. So you want to get rid of even local government institutions. Uh that's a mistake actually libertarians make is is spending all of their time fighting like the local nobodies in the local government and acting like that's where you should concentrate your efforts. Meanwhile, the CIA, the the surveillance state, the national security state is is running unchecked, but you're concentrating on like the local county treasurer in puffy paint sweatshirt uh who's like an 80-year-old woman. this is who you spend your time going after. I'm not going to say there's not corruption at the local level, but I would say tearing down your local government civic institutions while letting the centralized state run rampant is not a great idea. >> Right. Well, and further, if you do destroy those local institutions, you have no one who wants to run uh for these offices because of the headaches that their neighbors are causing them. Uh then that opens the door for uh what what some might call a power vacuum for the the state level [clears throat] or maybe the federal level to uh to creep in even further. And that really is the the essence of the progressive movement in the early 20th century, right? It is to bring the individual or the household in closer and deeper connection to the centralized government. And uh so if um if you're going to attack somebody, don't as you said, go don't attack someone who's in your local city council, as you said, the 80-year-old treasurer who's uh you know, trying to put in the time and make sure that the locals are fiscally responsible, right? Uh so this is a a pathway to uh to open the door for the centralized state. >> And of course I don't mind, right, when people vote out an entire city council for uh secretly installing flock cameras and things like that, right? By I mean I couldn't care less if those people's careers are ruined and so on. It's just I also recognize that actually those programs probably wouldn't even be funded uh at the local level without federal dollars. And the real problem is really the central state in most case. That's where most of those problems can be traced back the the horrible things that local governments do a lot of the time. But yeah, let's talk about the non-state institutions, right? I say the same things you say, which is right. Once you have hollowed out and and destroyed families and churches, then what stands between the individual and the centralized state? And these are natural enemies of the state, right? Family and church. And I want just wanted to read I read that same article you just mentioned from Civas uh and I pulled out I think what was one of the best uh paragraphs. I'm going to read it to you now. Um and this is how it goes. It says the intervention bias is this is the of course this bias that we need the government to inter intercede in order to strengthen families and do whatever. The intervention bias is what Roger Scrutin called state sponsored culture. Under its weight, the family becomes a subversive institution perpetually at war with the state and the state sponsored culture and its absence yields what scrutin called the state produced animal namely children who are surviile adults. The essay stands against the state produced and or this essay this is you speaking stands against the state produced and state sponsored family. Such children are not only feebler in mind and civic virtue but fewer and farther in between because family sponsored culture has been crowded out by the state's fiscal monetary and regulatory tools for scrutin. Family ties serve as an underground conspiracy against them. And this is right. This is what families are and especially big families that are close with each other. They're a conspiracy against the state because from cradle to grave, you now have a uh a loyalty >> that's outside the state. You have relationships that are more important than your relationship with the state. >> And many people forget that for millions and millions of Americans, their most important relationship is in fact with the state. >> Yeah. and not only with the state but which party they affiliate with in the state. We've seen this really accelerated under the uh the co hysteria, right? But families broke apart along political lines. So that demonstrates that political or um you know power allegiance is more important than what what scrutin also called in a different article ooilia, right? Oas the household felia the love of the household. And I think we uh we have a museum grade case of it in what we saw in COVID and and even going a little bit before that is you know people wouldn't speak to each other over Thanksgiving because of who they voted for in 2016 or 2020 or the next election right but that those kinds of people are exactly I think the people that scrutinous talking about their primary allegiance is to the state and its agents rather than to their households and communities and that is um frankly uh the symptom of a corroding empire. I I don't see it any other way. I mean I think that's where we're at >> and I not to take the black pill today, but I think that's symptomatic, right? [laughter] We we've got to understand where we're at. >> Well, I think that's just an illustration of how our our weakened social institutions are undermining just the strength of society overall. Right? When you look at a lot of the work that sociologists have done about the decline of the family since the mid60s and it it really is astounding when you look at the decline in time that people spend with family members, the time the amount of time people spend with children, the amount of time people spend devoted to some sort of local service in their community. It's all collapsed. Uh it it's not just some small decline. It is just a complete hollowing out of these institutions. something that should alarm everyone. And it happened however gradually enough that I think a lot of people just have no sense of how empty society is now in terms of individuals in the relationship with the state >> with nothing in between. Of course, you can see it in the church numbers, right? The church attendance has absolutely collapsed across the board. Uh even with some recent increases in certain religious groups, it's nothing compared to what it was in the past. and just as a social institution, right? I mean, we could talk about how devoted people were to religious practice and things like that, but the fact of the matter is they spent a large chunk of their lives in and around these institutions, which centered them in a different direction than spending all their time talking about politics and watching politicians on TV. uh whereas now it's just almost constant talk about that sort of thing and you have nothing else that that requires your loyalty or your attention. Uh so as long as that's continuing I I really just don't see any way of building back from that. You've got to rebuild all of those institutions if your hope is to really contain state power. >> Yeah. And and that's on the positive side. I think you're right to mention the concern of u supporters of the Mises Institute that uh again where's the where's the avenue for hope where's the avenue for improving the situation and it is by uh by taking care of your your kids in a really robust way uh uh the homeschooling movement I think is uh is an encouraging place where we see that happening very deliberately and what's interesting is that you know the homeschool movement started off uh really kicked off by the left in the 60s and 70s, right? They viewed the modern education system uh you know, in the post sort of McCarthy era as as this fascistic institution and so they pull their kids out for uh sort of left-leaning reasons. But of course, the right has now um seen the need to get their kids out of schools. And one generation later, you see many, many of those children beginning their own families and saying,"Well, we're not even thinking about public education." Like, why would we why would we do that? And so, these trends can be reversed. And I think that the homeschooling movement is one example of where that's come through pretty powerfully, and we should cheer that on as uh something that bolsters family, civic institutions, and that erodess the power of the state. So that's just one way among among several. >> Well, the problem with things like that though is these are multigenerational efforts, right? That require >> lots of effort and commitment and passing down information uh to the next generation. And nobody wants that. You want a quick fix, which is why you want to give $9,000 just to people and think that that's going to solve >> the problem. And but before we go, right, I think just as a last part of this, just considering some of the implementation issues with this and looking at how these sorts of plans have affected the family in the past, right? It's for decades it became sort of this conservative talking point that the introduction of the welfare state destroyed families, particularly non-white families, right? You get this from Thomas Soul. You get this from other conservatives is, oh, they gave money. >> They put on welfare, these families. They they reoriented their allegiance to the state and to government money. And that was a terrible thing. And now we've got conservatives saying, "Well, we should we should give families more money." Now I Now, as we might point out that Vance is saying, "Oh, well, it has to be a married couple in order to receive this money." So you immediately just see how unimplementable the whole thing is, right? Okay. What if one of the spouses dies? Do you then remove the money? What if uh there's a divorce? Do you take away the money? What if there's uh one a couple that gets divorced and then remarried? Does the new spouse bring his kids? Does that are we now melding? Like we got $18,000 worth of money that are that are coming together. And I suppose maybe you would argue, oh, this will keep people married longer. Of course, then then you're looking at fraud, >> uh, where they're pretending to be married for purposes of getting money. I mean, the whole thing is such a mess. >> And yet, as we pointed out, it doesn't work. We've It used conservatives used to say giving welfare money to families was a bad thing. Now, it's a good thing. I I mean, what [laughter] what do we do with this? >> Well, yeah. I mean, I think that uh I think that this is a a power play by the right and they have taken the cue from the left that you make these kinds of promises and you endear the electorate to uh to yourself and they know their base. I mean, they know what their base wants and give some kind of plausible uh explanation about how we can get there using as we said central planning and federal government funds, which is to say your neighbors tax dollars. But nevertheless, this is going to expand the scope of dependency in in society and in culture. And so if you have a dependent people that is relying on the government for making ends meet, then that again is really an an anti- what they used to call in the '90s family values that came from the right. And so the the irony here is just inescapable. And so the right has uh has adopted a left tactic to try to secure power and to motivate the base. I think that that's really what we're looking at here. And uh I think that this particular proposal is uh is dead on arrival because there was so much push back by uh some folks on the right who said, "Yeah, this is just an expansion of the welfare state and of central power and uh called it out for what it is." So, I don't think it's going anywhere, but it does reveal the way in which some uh conservative uh thinkers are headed. So, that's that's what makes this important. Well, Jeffrey Degar, thank you for joining me today uh here on Radio Rothbart. Uh as I note, you can uh find some of his content over there at the American Institute for Economic Research. That's a right.org is I think on the website on that. >> Yes, sir. Um, of course you can find other stuff that he's done over at mises.org, our own website. That's misc.org. If you're interested in this sort of content, be sure and click on subscribe up at the top of the page. So, thank you Jeffrey for joining me. Thank you everyone out there for listening. We'll be back next time with more. So, we'll see you then.