Carte Blanche: Corporate Welfare, Taxpayer Loss

When you think of welfare, what image is invoked in your mind? Is it the government helping the old and the infirm in their hour of need so that they can have the necessities of life, or is it bailing out corporations from their bad decisions and misadventures at the expense of the American taxpayer? Whatever comes to mind, you can be sure that the federal government is eager to look after the latter at the cost of the services and income of the former. It's not just in the form of bailouts for major corporations, but also in government-backed student loans that have created a debt trap that the modern generations might never escape from. The result is a costly system that has become entrenched in every aspect of Americans' lives, failing not only to deliver on its promises but also to erode the ability to function without it.

Corporate welfare has become a fixture in the economy. Its history can be traced back to the nation's founding when the first Secretary of the Treasury, Alexander Hamilton, advocated for government grants for certain manufacturers. It was no coincidence that Hamilton was involved in certain business ventures that later received those same grants and government protections. Placing the thumb of government on the scales has always been to the benefit of powerful corporations and the government itself. The outcome has been much the same each time. Corporations can outlast, outspend, and, through government regulations, outperform smaller businesses, all of which comes down to taxpayer funded government overreach that eliminates their options in the free market, with some estimates going as high as $181 billion in subsidies, from agriculture to energy production. Corporate conglomerates that own massive farms, slaughterhouses, clean energy manufacturing, and construction all receive government grants to keep them viable and profitable when they clearly are not. The consequences are felt every time there is a shortage or a government shutdown. Decades of government subsidies have narrowed the nation's supply chain of most consumer goods to a single point of failure that could one day have dire consequences.

Student debt has long been a hotly debated issue that has come to pass in the past few years. Starting with President Johnson and his 'Great Society' programs, universities have taken billions in student loans, with the only prerequisite being to admit as many students as possible. The outcome has been disastrous. Generations of young people were told that the key to success was a college degree. Millions are heavily indebted, with as many as 1 in 6 defaulting on their loans. Many have degrees that don't correlate with their vocation, and many others have degrees with limited employment opportunities that now have large pools to draw from. While large lenders and banks were involved for a while, they eventually saw the writing on the wall and most divested from them. The debt now owns the majority of the $1.2 trillion. This means the compounded list of the federal government's bad decisions, yet again, falls on the taxpayer.

Suppose there is a place to look for the long-term consequences of the government's fiscal miscalculations, not just at the budgetary level but also at the social level. In that case, we need to look no further than the welfare programs for the average citizen. The model employed by the U.S. neither incentivizes work nor promotes sustainable economic growth for those in constrained socioeconomic circumstances. While it does provide many benefits for food, housing, and a certain degree of income, it also disincentivizes those in the system who exceed the acceptable levels, out of fear of losing the benefits they've gained. Medicaid, in particular, has grown to unsustainable proportions, becoming so all-inclusive that it deters those enrolled from seeking private insurance. Those insurers can't offer the same coverage at the same price, and the effect is seen in reduced capabilities and higher premiums from private insurers.

The government has grown to levels exceeding the darkest nightmares of the founders. With a debt of over $38 trillion and no signs of slowing, the government continues to subsidize corporations and programs that cost taxpayers more each passing day, with no long-term return on investment. Over 22%, or $8.2 trillion, of the debt is owned by both banks and investors. The same companies and institutions that the government regularly gives tax incentives, handouts, and subsidies to. The very thought of compounded interest on the money those same groups have received over the past few decades would be mind-blowing compared to how much they've made and the debt they now owe. The systems that have been put in place over decades, through dozens of pieces of legislation, have made it possible, especially after 2008, for so many businesses to flourish despite their lack of competitiveness, and are an utter failure. The American people effectively fund everything that has led to every economic downturn since these policies’ inception. As the system is on the brink of breaking, or all-out collapse, there is at last a chance for change; for the U.S. economy to finally transition from a corporate welfare system that benefits only a small group of wealthy individuals to a free-market system that many claim the nation has. By breaking the reliance on government handouts, subsidies, and programs that only make everyone and everything they touch entirely dependent. There is a real possibility of freedom of choice and freedom from forced participation, which has long held the nation hostage. The choice may not be a pleasant one at first, but the possibilities and the liberation from government shortcomings could be well worth it.