Monday, January 9, 2012

A Layman's View on Government Subsidies

Our economy cannot afford to absorb this theft and fraud. If we stay just within the "public" sector, that portion our taxes attribute, the federal spending deficit is at the point of extreme irresponsibility. The government wants more money to spend, by increasing revenue (acquired from taxation). If you gave your kid a $10 a week allowance and you watched him spend it on $15 worth of lottery tickets each week, would you give him a raise in allowance? I wouldn't. I'd cut his allowance and tell him to learn to live within his means.


Our government, both the executive and legislative branches, spend, without a budget mind you, whatever revenue it accrues plus whatever it can borrow (with no repayment plans). How do you cure that? You cut them off. You tell them to spend on necessities (Defense, Diplomacy, Veterans' Benefits, Debt, and Operating Expenses). Then you tell them to cut out the crappy spending:  subsidies of unproductive individuals and businesses.

Recently, 20 year old Christine Roussell published an OP-ED article in "The College Conservative" that documented cases of subsidy abuse she witnessed while working at Walmart. Now, people will try to argue that "welfare" isn't a "subsidy". I refer them to their closest dictionary of acceptable English words in order to clarify the definition. If you look at the "c" option under the primary definition of "a gift or grant of money", you will notice that includes grants of money to private citizens. That means subsidies for sustenance, commonly called "welfare".

Miss Rousselle's "My Time At Walmart" drew a lot of media attention, and thousands of comments both in support of her article and chastising her. After her unexpected 15 minutes of flash fame, she published a follow-up in response to contentious editorials, blogs, and comments that attempted more to attack the author than rationally discuss the issue and her observations.

Among the comments on the articles, I have noticed several people attacking those who support "welfare" reform with arguments that the government needs to start with reforming subsidies of "big-business" and "leave the poor, hungry people alone".

The above leads to my following thoughts.

Our country is founded upon the ideal of equal opportunity to succeed and prosper. It is not founded upon an ideal of equality of results. That means that every person, every business, every organization has an equal opportunity to succeed or fail on its own merits or faults. The "Inalienable Rights" enumerated in the Declaration of Independence and reaffirmed in Lincoln's Gettysburg Address are "Life, Liberty, and the Pursuit of Happiness". Anybody who has done their responsibility to self-educate has taken the time to read the Federalist Papers. It should be more than obvious that the government has no right or authority to decide who succeeds. That is to be left to individual efforts, successes, and failures.

The 14th Amendment to the US Constitution further backs this ideal in stating that all law-abiding adult citizens of the United States have equal protections under the law. No laws can be passed that do not apply equally across the states and the individuals.

So, my current view comes down to one simple question:  How do subsidies to companies deemed "too big to fail" and subsides to those "unwilling to prosper" apply equally among the states and individuals?

They don't.

Giving bailout money to General Motors and subsidizing production of the failed vehicle, the Chevy Volt, does not apply equally among the states or the people. Most people won't purchase one. They are not produced in all 50 states. In fact, the production is moving to China. If you combine all other cars either manufactured in the US or produced by US-based companies, these subsidies were for a vast minority. This was not for the common good of the country. It was for one company and the labor union they employ.

On the concept of food subsidies to the poor, it follows the same concept. It does not lend to the overall prosperity of the country. Among those receiving the subsidies, "welfare", you have those who won't work. They don't think they have to. Their necessities are all taken care of by the "nanny state". It serves as an incentive to not work, produce, succeed, or prosper. It inhibits the "Pursuit of Happiness" by killing the very spirit of excellence our country was founded upon.

Here is one student-journalist's account of how she qualified for EBT. 

Those subsidies do not go to all citizens equally. You have to qualify for them. If everybody received the same stipend, I would be more accepting of the program. However, if everybody received this money, it would defeat the whole system in the first place as it would be more prudent to just let people keep what they earned. It is a proven fact that free market capitalism and the laws of supply and demand work, while socialism is an experiment that has proven to fail time and again. Look at the 70 year history of the USSR. Take a look at Greece and the rest of the EU today. Socialism fails.

Now, I agree with giving aid (food subsidies) to two demographics: The "deserving poor" and the "working poor". Those in between should be left in the cold until they get off their butts and do something for themselves.

Who are the "deserving poor"? Well, among them are the elderly who are no longer capable of working, for one reason or another. Some of these had their life savings stolen from them. Others out-lived their expectations and had their money run out. Other "deserving poor" include people who were disabled to a point of no longer being capable of working. being disabled is not a qualifier in and of itself. if you think the disabled are incapable of producing, succeeding, and prospering on their own merits, tell it to this guy. I'm sure Nick has a few words for you if you think disabilities equal an inability to exceed.

The "working poor" are those who have fallen on hard times. If somebody is giving it their all, busting their butt, producing, and trying to make it, I think they deserve a shot in the arm to bolster that chance. However, it should be temporary. If they are working while taking vocational classes to better themselves in the long-run, I am even more for that temporary assistance.

However, the other demographic of those not working, not producing, not trying but want their government check, they need an incentive. That incentive should be self-preservation. Survival is the greatest incentive for any living creature. "I'm a starving artist". Really? What paintings have you produced? Let me see your art. If it sucks, you may want to find another career. You are failing.

Advocates of the "nanny state" are now hating me for bashing the "undeserving poor" that are living off of my hard earned money. Don't worry, kids, I'm about to discuss the other side.

Let's discuss another subsidy:  Solyndra. That was a whole bunch of OUR money wasted. It led to over 1,000 people added to the unemployment statistics. How many of them ended up on welfare to top it off? Why was this company chosen by the government to succeed? (It failed, mind you). Where in the US Constitution does it state that the federal government is authorized to engage in venture capitalism with OUR money? I'll give you a huge hint, it isn't in there. For a great commentary on the current status of the Solyndra debacle and its effect on taxpayers, watch this video from PJTV.

Now, I will give a small argument towards Solyndra. They were bucking for a government/defense contract. But the horse was put before the cart. They should have developed and produced the products before getting that subsidy. Yes, it still would have been a "subsidy" because it would have gone to the greater benefit of defending our country. However, they will never fulfill that contract.

Another such misuse of tax money fraudulently claimed to be for "defense" was the DoD being forced to purchase biofuels from Solazyne. If the government followed the free market laws of supply and demand, that contract would have gone to something a lot more cost-effective. DoD assets such as tanks and jets could have purchased fuels that cost $4-$7 a gallon instead of $16-$26 a gallon. How many of you go to the gas station, buy 5 gallons of gasoline, hand the cashier a $100 bill, and tell them to keep the change? Well, the government just decided to do that for you. It is all a subsidy to one company chosen by our government under the guise of a "green defense initiative". The next question to ask is how many legislators and executive branch workers own stock in this company? I don't have those figures. However, I am willing to bet that there are multiple elected and appointed government officials who do.

Then you have $765+k in a federal subsidy to build an IHOP franchise for the DC elite. For a wonderful list of government subsidies and other ridiculous programs funded with our tax dollars, Read This!

That is not a law equally applied across the states or individuals either. The ethical questions are glaring. However, the adherence to the 14th Amendment is nonexistent. We are not all benefiting from this subsidy. In fact, it is easily argued that most people are suffering under the tyranny of it.

I will also posit that these subsidies of both corporations and lazy people are socialist attempts to destroy upward mobility and create a class system in our country. Without them, there is no class system. You can work towards success and prosperity or not. You can increase your wealth or you can lose it, squander it. You have the freedom to succeed or fail, on your own merits and efforts. Then these subsidies interfere, destroying the Pursuit of Happiness.

They are incentives for the poor to stay poor. Why work if somebody is paying you not to work and taking care of your necessities? Where is the incentive to prosper? They are incentives to crowd out free market competition. Why attempt a business endeavor based upon your great idea if the government is already choosing to back your less efficient competition? The incentives to succeed and prosper on your own merits (or fail on your own faults) are reduced or destroyed.

And it all comes down to government officials picking and choosing who they will subsidize and not applying the laws equally among the states or the individual citizens. In either case, "corporate welfare" and "poverty welfare" are BOTH wrong.The government does not supply subsides to all companies, large and small, corporate or sole-proprietor, equally. I see that as a violation of the 14th Amendment.

As far as "poverty welfare" is concerned, leave it to the states as their responsibility, and leave it to private charities and NPOs/NPCs. Remember, it is only charity if it is freely given. If it is taken by force (be it a gun or a "law"), it is theft.