The Socialist Republic of Knoxville?

David MoonBlog

The city of Knoxville received an additional $2.2 million in federal aid this week for its COVID-19 Housing Assistance Program, designed to assist Knoxville renters and homeowners with current and overdue housing payments. I generally believe that if a person obligates himself to do or pay something, he needs to be personally responsible for following through on his commitment. The current situation is unique, however, in that there are people who cannot make their housing payments solely because of the actions of federal, state and local governments. Landlords and lenders shouldn’t bear, without recourse, the cost of these unpaid payments. Collectively, we – society – created this problem. If redress is to be provided, it is society that should provide it.

This solution is a degree of socialism – and it is appropriate, especially when enacted at the local level.

Socialism is more likely to work in smaller groups (where people trust and can see other) led by a benevolent dictator with significant personal investment in the system. My family is such a socialist system. From each kid and parent according to his ability; to each according to his needs.

A city the size of Knoxville is small enough to test aspects of socialism, as long as Knoxville taxpayers consent to fully bear the cost of safety net or social benefit programs. A city could contemplate almost any type of social program. With enough political will and voter desire, Knoxville could retire the student loan debt of every resident. What difference does it make if such a program is implemented at the local, rather than federal level? Taxpayers must foot the bill either way. Implementing such a program at the local level would require a real debate about our community’s priorities, as funding would have to come from money directed from existing city services or new taxes.

Universal health care? Why not? San Francisco offers a subsidized medical insurance program to all its residents.

This would work with almost anything. We already do it for K-12 education. If enough Knoxvillians believe that free avocado toast is a basic human right, we can create, manage and locally fund Market Square toast kiosks.

The key to using cities as test laboratories for expanded social services is that programs must be funded locally. This forces taxpayers to define collective priorities. When a local program is fully funded with federal dollars, the only meaningful local discussions that ensue are “how do we spend it?” and “can we get more?” Local funding creates an ongoing cost/benefit analysis that rarely exists when there is the illusion of no cost. And if expected to explicitly fund local social programs, taxpayers might be less eager to call for free stuff.

David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.