The Loggers Act: Learning Nothing From Our Inflationary Mistakes

The Loggers Economic Assistance and Relief Act, recently introduced by Representatives Jared Golden and Susan Collins, proposes to establish a permanent disaster relief program for timber businesses within the U.S. Department of Agriculture. While proponents frame this as simply extending to loggers the same protections farmers and fishermen enjoy, the legislation is more accurately understood as an attempt to institutionalize the failed economic policies of the pandemic era. We tried this experiment already with the Pandemic Assistance for Timber Harvesters and Haulers (PATHH) program, and the results speak for themselves: widespread inflation, economic distortion, and aggregate suffering that far exceeded any targeted benefits.

A Familiar Template

The structural similarities between the proposed legislation and PATHH are impossible to ignore. Both programs provide direct payments to timber businesses experiencing revenue losses, calculating assistance based on gross revenue declines. The pandemic-era PATHH program distributed up to $200 million to logging operations that experienced at least a 10 percent revenue loss in 2020 compared to 2019, with payments covering 80 percent of that loss. The new Loggers Act employs nearly identical mechanics, triggered by disaster declarations and calculated on comparable revenue-loss formulas.

This is not coincidence. It is deliberate replication of a pandemic-era intervention model that contributed materially to the inflation crisis that followed.

The Inflationary Record

The economic evidence on pandemic-era relief spending is now clear and damning. Research from the Federal Reserve Bank of St. Louis found that fiscal stimulus contributed approximately 2.6 percentage points to the 7.9 percent inflation rate observed in February 2022. Other economists have estimated the contribution even higher—between three and four percentage points of the inflation spike. When inflation peaked at 9.1 percent in June 2022, American families faced the highest cost increases in four decades, eroding purchasing power and creating genuine hardship for millions.

The mechanism was straightforward: massive injections of money into the economy stimulated demand without corresponding increases in supply, creating what researchers called “excess demand pressures in goods markets.” The result was predictable. Prices rose across the board—groceries, gasoline, housing, and virtually every consumer good. While programs like PATHH provided targeted relief to specific industries, they contributed to a broader inflationary environment that harmed everyone, especially those on fixed incomes and wage earners whose salaries failed to keep pace with rising costs.

The pandemic relief package that funded PATHH—the American Rescue Plan—injected $1.9 trillion into an economy already recovering. Multiple economists, including Lawrence Summers and Jason Furman, warned at the time that such massive spending would prove inflationary. They were correct. By 2022, families were paying substantially more for basic necessities, effectively taxing the entire population to fund targeted industry assistance.

The Moral Calculus

Here lies the fundamental moral problem with the Loggers Act. Its proponents have witnessed the aggregate economic pain caused by pandemic-era assistance programs. They have seen how inflationary pressures eroded savings, increased costs, and created genuine hardship for millions of Americans. Yet they propose to recreate this dynamic for the benefit of one specific industry.

To observe the harm inflation caused across the entire economy—to recognize that everyone, from retirees to young families, paid a price through diminished purchasing power—and then to advocate for policies that risk similar consequences for a narrow constituency is difficult to defend on moral grounds. It represents a preference for concentrated benefits over diffuse costs, gambling with the economic wellbeing of the many to provide insurance for the few.

The logging industry employs important workers and provides valuable services. But so do countless other sectors that must weather economic disruptions without targeted federal assistance. Construction workers face weather disruptions. Retailers cope with changing consumer patterns. Service industries navigate economic cycles. The vast majority of American businesses operate without the safety net of direct federal payments calibrated to their revenue fluctuations.

Gaming the Cantillon Effect

What the Loggers Act actually represents is a sophisticated attempt to exploit what economists call the Cantillon effect—the phenomenon by which those who receive new money first benefit at the expense of those who receive it later, if at all. When government injects money into the economy, it does not distribute evenly. The initial recipients—in this case, timber businesses receiving disaster payments—can spend those funds before prices adjust upward. They purchase goods, hire services, and invest at pre-inflation prices.

The timber industry’s pursuit of this legislation is no accident, nor is it simply a matter of disaster preparedness. It reflects the industry’s sophisticated understanding of how to leverage political connections for economic advantage. The same Maine politicians backing the Loggers Act—particularly Senator Susan Collins and Representative Jared Golden—have been working hand-in-glove with the timber lobby to secure federal bailouts for industry challenges. Most recently, Collins secured $14 million in federal disaster relief funding for spruce budworm spraying, while Governor Janet Mills proposed an additional $2 million in state funds. The Maine Budworm Response Coalition—composed of major timberland owners—has successfully advocated for tens of millions in emergency funding to protect timber industry profits from a natural pest cycle that occurs roughly every 40 years.

This pattern reveals the Loggers Act for what it truly is: not emergency relief legislation, but the formalization of preferential access to federal funds by a politically connected industry. When an industry can routinely secure government intervention for predictable business challenges—whether pest outbreaks or revenue fluctuations—it is engaging in rent-seeking behavior, not risk management.

Meanwhile, the broader population experiences price increases without corresponding income adjustments. The inflationary impact ripples outward, with wage earners and those on fixed incomes bearing the ultimate cost. This is not a theoretical concern. During the pandemic, asset owners and investors—those closest to monetary expansion—saw their wealth increase substantially while wage earners struggled with rising costs. Wealth inequality widened as a direct result of these interventions.

The Cantillon effect operates as a regressive transfer mechanism, moving purchasing power from those less connected to government assistance toward those who receive direct payments. Creating a permanent program that institutionalizes this dynamic for a single industry is economically unjustifiable and morally questionable.

The Agricultural Subsidy Precedent

We need only look at agricultural subsidies to see where this path leads. Decades of farm support programs have created a system plagued by inefficiency, market distortion, and perverse outcomes. Research consistently shows that agricultural subsidies lead to resource misallocation, encourage overproduction, distort international trade, harm developing countries, and primarily benefit large commercial operations rather than small family farms.

The Heritage Foundation’s research demonstrates that farm subsidies raise food prices, reduce trade, and redistribute income regressively. A United Nations Food and Agriculture Organization study found that 87 percent of the $540 billion in annual global agricultural subsidies between 2013 and 2018 were harmful to both people and environment. The International Monetary Fund has documented how agricultural subsidies contribute to environmental degradation, create allocative inefficiencies, and impose significant fiscal costs without achieving their stated objectives.

Perhaps most tellingly, when New Zealand eliminated all farm subsidies in 1984—a radical move given that country’s heavy dependence on agriculture—the industry not only survived but thrived. Productivity increased, land was allocated more efficiently, and environmental outcomes improved. The subsidies themselves had been creating problems, not solving them.

The Loggers Act proposes to create this same subsidy dynamic in forestry. Timber businesses would adjust their operations and investment decisions based on the availability of federal assistance rather than market signals. Resources would flow toward politically connected sectors rather than their most economically productive uses. Over time, the industry would become dependent on federal support, with each economic disruption generating demands for expanded assistance.

A Better Path

None of this suggests callousness toward genuine hardship. Natural disasters create real problems for businesses and communities. But the solution is not permanent federal subsidy programs that distort markets, contribute to inflation, and redistribute costs to the broader public.

Robust insurance markets, combined with existing Small Business Administration disaster assistance programs, provide mechanisms for managing catastrophic risk without creating permanent market distortions. Private risk management, supplemented by truly catastrophic relief, offers a more economically sound approach than institutionalizing direct federal payments based on revenue fluctuations.

Beyond Excuses

The pandemic era taught expensive lessons about the consequences of aggressive fiscal intervention. Inflation, as it turns out, is not merely an abstract concern but a tangible reduction in living standards that falls hardest on those least able to bear it. The Loggers Economic Assistance and Relief Act proposes to ignore those lessons in service of one industry’s interests.

We cannot build sound economic policy by selectively distributing the costs of assistance to everyone while concentrating benefits among the politically organized few. We cannot address every industry’s challenges through federal subsidy without eventually undermining the market economy itself. And we cannot acknowledge the painful costs of pandemic-era inflation while simultaneously recreating the policies that caused it.

The Loggers Act deserves rejection not because timber workers are undeserving, but because the approach is fundamentally flawed. We know where permanent subsidy programs lead. We know what happens when we ignore the broad costs of targeted assistance. The question is whether we have the resolve to learn from recent experience or whether we will repeat the same mistakes, one industry at a time, until the cumulative costs become unbearable.

The answer we give will reveal whether we take economic policy seriously or merely treat it as a vehicle for distributing political favors dressed up as disaster relief.