Corporate Welfare

Thoughts on a Free Market Economy…
“Corporate Welfare”
By Phyllis Hunsinger
July 13, 2015

Corporate welfare is a term used to describe the financial assistance and tax advantages given to corporations and other businesses by the Federal and State governments. Welfare payment to individuals is ostensibly to prevent poverty or to improve living conditions. Corporate welfare is entirely different and is in the form of subsidies, tax-breaks, special contracts, or grants to large corporations or other business entities.

As the national debt is $18 Trillion and rising, the nation is being pushed toward an economic crisis. There appear to be many ways for the government to save money, but one obvious way would be to review and remove wasteful and damaging programs such as corporate welfare. According to Tad DeHaven in July, 2012, corporate welfare in the federal budget costs taxpayers almost $100 Billion per year.

During the recession of 2008, the policymakers in the U.S. government financially bailed out the banks and General Motors and other business entities by saying they were “too big to fail.” But really, why is something too big to fail? As Mr. DeHaven said, “Corporate welfare often subsidizes failing and mismanaged businesses and induces firms to spend more time on lobbying rather than on making better products. Instead of correcting market failures, federal subsidies misallocate resources and introduce government failures into the marketplace.”

One of many such examples is Solyndra, where many taxpayer dollars were spent on flawed products, procedures, and marketing. When government gets involved with private enterprise, an unfair advantage is created for the subsidized businesses. The connections developed between politicians and business leaders are unhealthy resulting in the corruption scandals regularly coming out of Washington, D.C. The special interest groups retain their favored status through political support for politicians at the expense of taxpayers and the general public.

Philip Mattera, February, 2014, has written extensively about subsidizing the corporate one percent and developed Subsidy Tracker 2.0 which demonstrates the nature of these taxpayer subsidies authorized by State and Federal politicians. There are an amazing number of corporations found who are benefiting from “crony capitalism.”

Corporate welfare does not aid economic growth, but it does aid politicians in securing votes from subsidy receiving constituents. Corporate welfare undermines the economy at the expense of average taxpayers and smaller, less favored businesses. Corporate welfare is detrimental to the United States and makes a mockery of limited government and equality under the Constitution.

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