The executive order that could kill trillion-dollar bailouts

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The federal government doesn't just spend-it also regulates through spending. That's one reason crises so often inflate Washington's role in American life. But as I describe in a new article at Forbes, a fresh executive order from Donald Trump could begin reversing that pattern, nudging states to prepare for disasters before the next emergency hits-and without relying on trillion-dollar federal rescues.

Executive Order 14239, titled "Achieving Efficiency Through State and Local Preparedness," directs states to get their act together and lead on disaster planning and infrastructure resilience. It doesn't seem all that flashy, but it could be one of the most consequential deregulatory shifts we've seen in years.

The federal response to COVID-19 exposed just how centralized and fragile our system has become. Instead of rewarding preparedness, Washington rewarded dependency. States got bailed out regardless of their policy choices, and the resulting flood of federal dollars-notably via the CARES Act and the American Rescue Plan-have paved the way for ideas like the universal basic income to gain traction.

In contrast, Trump's order aims to empower states, localities, and even individuals to prepare for crises-from hurricanes and wildfires to cyberattacks-on their own terms. While it could do a better job encompassing universal shocks like COVID or the 2008 financial crisis, it mandates a National Resilience Strategy within 90 days and instructs the Federal Emergency Management Agency (FEMA) to review its preparedness playbook. The idea? Stop throwing money at every crisis and start building real, risk-based resilience from the ground up.

Of course, not every state will be equally equipped. But as I've argued in the past in making the case for an "Abuse-of-Crisis Prevention Act," or AOC Prevention Act, (see image below) we need structural reforms that reduce moral hazard and reward independence-like rethinking emergency declarations, de-taxing savings and insurance, and deregulating rainy-day funds.

This executive order echoes those ideas and could be the first step toward a broader AOC Prevention Act. If states rise to the occasion, the next crisis might actually shrink Washington's footprint rather than expanding it.

For more see:

"FEMA to Freedom: Can Trump Make States Doomsday-Prep Dynamos?" Forbes

The Case for Letting Crises Go to Waste: How an 'Abuse-of-Crisis Prevention Act' Can Help Rein in Runaway Government Growth, Competitive Enterprise Institute