South Dakota needs more affordable housing, but it’s spent less than a tenth of the federal and state money set aside to help low-income South Dakotans afford their rent during the pandemic:
As of early January 2022, the state had received about $271 million in federal funding to pay rent and utilities of low-income residents who fell behind during the pandemic. But so far, the state has distributed only about $24.9 million to needy residents, or about 9.2% of the total available funding.
In September, South Dakota and other states that did not spend the money fast enough were required to return some of the money to the federal Treasury. That month, South Dakota returned about $22 million in unused housing assistance funds to the federal government, which is reallocating the excess money to states that are using it faster [Bart Pfankuch, “South Dakota Returns Millions in Unused Housing Assistance Funds to Federal Government,” South Dakota News Watch, 2022.01.12].
Now you’d think our Republican delegation to Washington, with its feigned fear of deficit spending, would cheer this frugal resistance to inflationary stimulus. But Congressman Dusty Johnson trips on his fiscal laces:
“The Biden Administration flooded states with cash and they can’t spend this money fast enough,” Johnson wrote. “I’d like flexibility for states to spend unused dollars on things like roads and bridges before [C]ongress considers even more inflationary deficit spending” [Pfankuch, 2022.01.12].
Dusty, I know you Republicans contradict yourselves on the dangers of deficit spending from year to year, depending on whether Democrats are in charge, but you can’t contradict yourself from sentence to sentence in the same minute, where we all can plainly see the contradiction. If deficit spending causes inflation (and there may be alternative causes, like supply chain tie-ups, surges in demand, and shortage of workers), it doesn’t matter where we spend that deficit cash. Rent support, utilities checks, roads and bridges, affordable housing, sewers, water projects, child care—the cash all pours into the same economy, stimulating purchasing and jobs, and cranking on the inflation lever you just said you want to stop cranking on. It’s as if Dusty is at McDonald’s ordering a Big Mac, the cashier asks if he wants fries with that, and Dusty says, No, thanks, I gotta watch my weight, so make that two Big Macs.
[Disclaimer: Dusty and I have the same metabolism; it may be years before Dusty has to say no to Big Macs.]
Deficit spending is deficit spending, and inflation is inflation. If they are bad, then they are bad whether Democrats or Republicans are in charge of spending those deficit dollars and creating that inflation. If deficit spending creates inflation, and if we send back a bunch of deficit spending we don’t need for affordable housing, then Republicans ought to be happy that we are dodging a little more inflation, not advocating that we redirect that deficit spending to other spending that would bring back that inflation.
Do you see how hard it is to figure out fiscal policy and economics when you try listening to Republicans? Make life simpler: elect Democrats!