The federal government is an extremely poor resource allocator. It knows nothing about local and personal wants and needs. In my view, funding should be dolled out to individuals and maybe local governments. That way money flows from the bottom up, not top down.

The money flow is an extremely important factor: when money flows to individuals, each individual gains "votes" to allocate resources. Those votes informs how and where the economy grows at a granular level. The federal government cannot do this with any level of precision or efficiency.

If higher levels of government need money to do things, they should tax for--this includes some portion of the transfer payments. I know it sounds redundant for the government to tax money they've handed out, but I think governments need to feel the pain of working to get the money in the first place.

I'm also convinced you would dramatically reduce the amount of fraud and favoritism that occurs since decision making will end up being decentralized.

Here's a "hot take" example. The federal government funding child care is a dumb idea.

1) Not everyone needs child care.

2) Not everyone needs child care in the way the federal government wants to provide it.

3) An entire bureaucratic apparatus needs to be developed to define what child care is, what constitutes valid child care, who can provide child care, blah, blah, blah. This will be expensive to manage and will metasticize in its own way over time.

So why not just give people money to people who have young children to do whatever they want to do with it?

Maybe you add some provisions to prevent people from making babies to cash in checks, but I'm assuming writ large I can trust my fellow citizen to make better decisions about their child care than whatever "governmental apparatus" we want to create to do that for them.

Well intentioned thoughts like these are a good default for the government running in cruise control - when there is no financial volatility. A stimulus is only required during a recession. In each recession, we have only allowed the Fed to print more money, which hasn't turned out well. Instead of printing this money and raising asset prices, during each recession, fiscal policy should help increase the supply of things direly in need. If a recession is causing food shortages, we don't want printed money to increase demand for food. We would do much better by literally subsidizing X units of food for the next 1 year.

In both cases you give money to food producers and in turn they increase production. The only difference is in your case the price signal is entirely lost.

For example, say we decide to subsidize corn. In theory, the government is taking money out of your pocket and giving it to the corn farmer who in turn gives corn to you a lower cost. So you're still effectively paying more for the same damn thing, the government just did it for you! Over time a massive bureaucracy and incentive structure will grow around corn farming and special interest groups will fight to the death to make sure corn subsidies never go away. Oh, wait, that's actually the world we live in.

Now imagine I give you cash for food--not specifically corn--you get to decide which food you spend it on. Say everyone can't get enough of corn. Sure, you're right, everyone will pay more for corn the difference is though we also see the price go up instead of the government hiding it. This price signal is very important. Once the price of corn gets too high for you, you will switch to some other food, and in turn different areas of the economy will be stimulated.

Food subsidies are exactly how you get big agriculture. Certain players know how to play the government game better and take advantage of it.

If I give everyone money, sure prices go up, but everyone has gained voting power against existing institutional players, and in my opinion, that is exactly how you get competition and growth.

Subsidizing production by incentivizing number of units is different from just creating demand and waiting for producers to match up.

By incentivizing number of units of production, say x% incentive for per 1000 bushels of corn AFTER 10k bushels, you are literally incentivizing production of food and suppressing prices. You are asking farmers to use as much land as possible to produce corn. This is assuming that there is a shortage of corn in the market. In this way, the market is flooded with cheap corn and prevents recession caused by corn. The benefit of this approach is that something useful actually got produced besides money.

By only creating demand, production is not guaranteed to ramp up. Many farmers will be happy to take more dollars for the same amount of corn, causing inflation, thus causing fed to raise rates, thus causing recession. The disadvantage of this is that nothing got produced except money.

This fiscal support should be timeboxed (say 1-year during a recession) to prvent the big ag monopolies you are talking about.

We don't even need to think in hypotheticals. Today, the biggest cause of inflation (and thus fed rate hikes and thus recession) is housing. There is some merit to raising rates and flattening demand. But the biggest solution would be to flood the market with supply of housing. Just incentivize builders to build 2 million units within a year with fiscal policy and bam, inflation is gone.

> Just incentivize builders to build 2 million units within a year with fiscal policy and bam, inflation is gone.

Why fiscal policy and not zoning laws or something? Why would giving money to developers lead to zero inflation?

The fiscal policy is meant to be a one-time, short term boost to the exact items that is causing CPI to go higher. The fiscal policy is meant to be timeboxed. A zoning law is a much more long term thing.

Your industries of the future won't operate well if the basics aren't kept up.

Of course, if this mattered, people would have already installed window blinds, which are cheap and easy. External eyebrows and eaves also work. "Smart" glass is an expensive solution, it's been around for 25 years, and nobody wants it.

Unless there's a downside that I'm not aware of, that seems like a reasonable thing to do?

"Among the Inflation Reduction Act's little-noticed yet potentially game-changing provisions: a big incentive for "smart glass," which can make buildings significantly more energy efficient."

I've seen smart glass demoed at a home show 25 years ago. I thought it was way cool, until they quoted the price. It's no surprise it hasn't gotten any traction since. Oh, it also consumed electric power when in dark mode, as much as a light bulb. It's not a passive system.

Window blinds, louvers, eyebrows, shades, etc., all work fine and are cheap.

BTW, when I lived in Phoenix in the 1970s, people would tape aluminum foil or newspapers on the windows to cut the heat intake. The newspapers would block most of the solar heat, but would let the light through.

Here in Seattle I made some reflective panels I can just stick on the windows when we have a heat wave. Plenty of light still gets in.

Technological progress is the secret to price reduction. No government interaction required or even wanted, it's usually much more likely to create problems...

That's generally true, but there are exceptions. Solar panels are very cheap now because of decades of government subsidies. Battery electric vehicles are still more expensive than their regular counterparts, but certainly one day they'll be cheaper (they have many more fewer moving parts). But would they have caught on without government subsidies?

Same amazing price reductions with li-ion batteries which are used in every mobile device. EVs? Who knows - but since the government is subsidizing gas prices, that market is already corrupted beyond salvation.

Governmental subsidies managed to skew demand and create market aberrations like the rainy Germany covered in solar panels while their nuclear sector was being closed.