Dear Friends,
It seems to me, you subsidize that which you want more of. That’s the rationale of subsidizing industry. Government wants to maintain, protect, and expand industry, farming, etc… so they subsidize them. If subsidies destroyed those who get them, no one would want them. Indeed there is an entire industry that has arisen simply to harvest subsidies from the government. Tens of millions of dollars are spent each year to buy subsidies from Congress. This tells me that not only are subsidies designed to perpetuate that which is subsidized but expand it as well. No where does this logic apply more appropriately than with poverty, crony capitalism, and illegal immigration. These things are so valuable to the rule makers they subsidize them with unlimited funds.
When government spends money it is supposed to be to advance the interests of the nation. The steel industry gets government subsidies to keep it competitive with other nations’ steel industries. Especially from those that are also subsidized. Else tariffs are used to negate the benefit of the other nation’s subsidies. Tariffs could also be called a subsidy if they benefit an industry and protect it from competition. The logic is that a steel industry is critical to a nation’s industrialization. A non-industrial nation is at the mercy of those that produce. It must import everything it uses and so has a perpetual trade deficit, leading to endemic poverty, with social discohesion as a result. That’s the chain of logic that pulls the gravy train. Subsidies are needed to advance the national interest.
A subsidy is supposed to create favorable conditions for the thing subsidized to grow. Farming is subsidized for just that reason. The idea is that there will be more farms if subsidies make them more profitable. It seems obvious that if farming becomes more profitable there will be more farming. Basic economics teaches us that. The counter argument is that if that thing wasn’t subsidized, it could go away entirely. It’s the stick of poverty as opposed to the carrot of wealth via industrialization and cheap food. Remember, every dollar given is two dollars taken from someone else. There is obviously overhead, that accounts for the taxes above the benefit. So the subsidized get a windfall at the expense of the unsubsidized. The extracted from must be sold some benefit for the cost.
That benefit is in the form of societal wealth, stability, and/or a rising standard of living. So when food is cheap everyone benefits, this is used to justify the farm subsidies. Any questions of the profitability of farming absent subsidies aren’t considered. The benefit is all that is seen… the cost remains unseen. They say we shouldn’t feed the deer, bear, and other wildlife in a park because it makes them dependent. This is a real cost of subsidizing poverty. It makes the impoverished dependent on the subsidy. It holds them in poverty. The result is crime, broken families, and dependent people. Giving illegal aliens welfare is a subsidy to protect and increase illegal immigration. It’s the same logic that’s applied to farming. So we can say the government wants more crime, poverty, and dependency.
When government subsidizes something, it wants more of that thing. This goes for steel, farming, and poverty. That the government subsidizes it, is proof the government wants more of it. With industry the logic is clean but with crime, poverty, and illegal immigration the logic is blurry. Why would the government want more of that? Perhaps they serve government’s interest? Crime makes people trust one another less and government more. Subsidized poverty makes the poor dependent on the government. That locks up their vote. Illegal immigration drives down the cost of labor. Especially when the illegal is subsidized and the citizen they compete against for jobs pays for those subsidies. This leads us to an uncomfortable truth. Those in power only subsidize that which benefits them.
Sincerely,
John Pepin
