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Thursday, May 28, 2020 Leer en Español

Why FEE Will Not Be Accepting Government Loans Under the CARES Act

FEE stands proudly by its decision to forego stimulus money.

“Why would you be worried about COVID?” quipped a professional acquaintance of mine recently as we discussed the economic downturn caused by the coronavirus pandemic. “FEE is a nonprofit . . . and the government has a lot of money!” He was implying that, for those of us in the nonprofit world, government money is an easy cash cow.

For some, it surely is. But what happens to a nonprofit when it starts to receive funding from the government? At what point does it become a mouthpiece for governmental interests? Surely neither you nor I are naïve enough to believe that government money has no influence—subtle or not-so-subtle—on its recipients. There are always strings attached and there are no free government lunches (or checks, for that matter).

From its inception in 1946, the Foundation for Economic Education (FEE) has battled government encroachment into people’s lives. Why should we allow government interests to encroach on our views and work now?

That is why FEE recently turned down the forgivable government loan of approximately $400,000 we are eligible for under the CARES Act.

To be clear: We don’t criticize others for taking one of these loans. Over 30 million Americans have lost their income and businesses of all sizes are struggling to survive—all because of irrational government action and unconstitutional overreach. Unnecessary harm has been wrought with seemingly no end in sight. We have deep sympathy, respect, and understanding for those who feel these loans are needed to feed their family and keep their business open. We’ve come to this point not because of the poor decisions of Americans, but because of the poor decisions of our state and federal governments.

Some might call this over-scrupulous: After all, FEE could spend that money wisely, using it to further economic education in the young generation. And at the same time, it’s reasonable to suspect that organizations on the Left will gladly welcome another infusion of taxpayers’ money to their coffers—fueling their lobbying efforts for even more taxpayer money.

At FEE, we would rather have our freedom and our integrity than a check from a governmental slush fund, thank you very much. We will continue educating the young generation, and we will continue doing so—as we have for the past 75 years—without government money. FEE will continue to depend, as it always has, on funding from private individuals, who freely choose to support our work because they share our convictions about the importance of individual liberty, free-market economics, private property, limited government, and high moral character.

As for the government, if it really wants to help the economy it should first do no harm by excessive taxation and over-regulation. It should cast aside the absurd belief that politicians know better than countless individuals specializing in the myriads of jobs and businesses they run every day. To recall Nobel laureate F.A. Hayek, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Ultimately, throwing stimulus money around is an unimaginative and ineffective solution to a complex problem. Stimulus checks and unemployment payments are mere painkillers that mask the underlying disease—people unable to work and create. And like a painkiller, the effect of stimulus checks is limited, temporary, and in the worst cases—addictive. Protracted periods of many people forced out of work destroys the economy, impoverishes taxpayers, and gives a dangerous amount of power to politicians.

The only true way to stimulate the economy is to allow people to work and create again—free of government overreach and burdensome regulation. Better yet, the government could simply leave money that it takes in the form of taxes in companies’ and families’ bank accounts, allowing them to invest, innovate, spend, and save as they desire.

The economy—this complex, peculiar, and unpredictable way people work with and for each other—is resilient when people can quickly switch from doing what is no longer needed to doing what is demanded. Flexibility, not rigidity provides strength. Throwing money from helicopters contributes nothing to resilience.

At the end of the day, our values, beliefs, and choices are our own. FEE stands proudly by its decision to forego stimulus money from the CARES Act, in spite of any short-term consequences, both because of the values we have proclaimed yesterday and today, and because we believe that this economic independence is all of our best path forward to a more prosperous, resilient tomorrow.

  • Zilvinas Silenas is the former president of the Foundation for Economic Education (FEE).