Tag: subsidy

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budgets & spending cuts crime and punishment deficits and debt free trade & free markets

The Great Rail Robbery

Amtrak, trains, subsidy, transportation

It’s unclear “what problem Amtrak privatization proposals are intended to solve,” an Amtrak white paper argues.

The authors assert that “giving the United States the passenger rail system it needs will require substantial, assured, multi-​year federal funding.…”

That flies in the face of experience. But if you are looking for a problem to solve, consider the biggest current story about Amtrak, its thieving employees. 

Buckle up, for the rail gets bumpy: Sixty-​one of 119 Amtrak employees exposed in 2022 for perpetrating a healthcare scam were kept on the job until a recent internal investigation. 

For several years, these employees had collected kickbacks from doctors willing to file fake medical claims. 

Amtrak now promises that it is (finally) cleaning house.

The organization’s inspector general says that the large number of employees “who cavalierly participated in this scheme to steal Amtrak’s funds suggests not only a serious lapse in basic ethics, but a troubling workforce culture … in which blatant criminal behavior was somehow normalized.”

A culture that DOGE has been finding in many governmental endeavors.

What governments lack are decent feedback mechanisms that real markets provide. Amtrak operates in a fake reality of “needs” — those infinite “needs” mentioned in the white paper against privatization.

Businesses succeed; businesses fail — and if the latter, they move aside to let others try to do better. But the white paper treats business failure as proof that government funding is mandatory.

For taxpayers, always on the hook for Amtrak failures, privatization is a solution.

Privatization would also mean less tolerance for keeping thieves on payrolls.

This is Common Sense. I’m Paul Jacob.

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Illustration created with Krea and Firefly

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national politics & policies subsidy

Community Chest

community chest, immigration, subsidy, incentives

When it’s time to go home, the circus manager has a trick up his sleeve, just to get people off the property: turn off the rides.

The U.S. is something of a circus today, so policymakers may want to take the cue.

This applies especially to illegal immigration on the southern border, which is increasingly being acknowledged as a major problem. While it may be interesting to learn, say, that this past month more Venezuelans than Mexicans were nabbed coming north (and, presumably, more not caught), the big picture truth is that since taking office President Joe Biden has presided over a huge increase in the overall illegal flow of economic migrants.

Switch off the subsidies and surely the rate would go down.

But what are the subsidies? 

A recent article in The Epoch Times explains: “Identification cards for illegal immigrants are increasingly being issued by non-​government organizations (NGOs) to help [border-​crossers] establish a foothold in U.S. cities and access services they can’t get through federal programs.”

The programs are mainly in blue cities and states, and thrive under the imprimatur of DEI: diversity, equity and inclusion programs. Often called “community IDs,” these instruments seemingly out of Monopoly, the board game, “are accepted by police departments, school districts, and food programs” across the country. 

What’s worrisome is that “the federal government grants billions of taxpayer funds to NGOs that help illegal immigrants who cannot usually access federal programs such as the Supplemental Nutrition Assistance Program (SNAP) and Children’s Health Insurance Program (CHIP).”

This makes the problem not one of “free immigration” but of subsidized immigration.

And that can, at least theoretically, be much more easily slowed. Stop giving money to NGOs to support this traffic. Existing taxpayers deserve at least that.

This is Common Sense. I’m Paul Jacob.

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Accountability deficits and debt national politics & policies subsidy

What a Relief

Covid relief money

Based on a quick look at the Edward M. Kennedy Institute for the United States Senate’s splash page, I wasn’t immediately sure what, precisely, the institute’s raison d’être might be. On the top menu bar there’s a slogan: “Just Vote.” Big clue? 

On the About page, though, we are told its mission: “educating the public about the important role of the Senate in our government, encouraging participatory democracy, invigorating civil discourse, and inspiring the next generation of citizens and leaders to engage in the civic life of their communities.”

As for the vision thing, that’s supplied by its namesake, Ted “I Survived Chappaquiddick” Kennedy: “To preserve our vibrant democracy for future generations, I believe it is critical to have a place where citizens can go to learn first-​hand about the Senate’s important role in our system of government.”

I guess that explains why the institute’s Boston location sports a replica room of the U.S. Senate chambers.

Which costs serious money, of course.

Paid for entirely by the ultra-​rich Kennedys?

Fact check: no. 

Some of it is paid for by you and me — courtesy of Congress and COVID!

You see, part of last year’s $350 billion in pandemic relief went to Boston’s memorial outfit for its once-​favored now-​deceased multi-​millionaire politician. Five million bucks, it turns out, was used (the AP tell us) to pay off the institute’s debt. 

But don’t worry: the Kennedy Institute wasn’t singled out. Relief funds — which you might think would focus on struggling local libraries, community centers, and the like — also went to building a posh hotel and a minor league baseball stadium. And much, much more.

While politicians are good at spending money, especially for “emergencies,” they aren’t good at spending it well.

This is Common Sense. I’m Paul Jacob.

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subsidy too much government

Throwing Big Bucks at the Rich

John Stossel, welfare, subsidy

John Stossel’s latest YouTube video focuses on the many ways “your tax dollars end up in millionaires’ pockets.” 

In an interview with Lisa Conyers, co-​author of Welfare for the Rich, they deplore how recent COVID Relief funds went to state governments already flush with surpluses and, disproportionately, to wealthier local communities.

“Politicians also give your money to companies that promise jobs,” explains Stossel, using as an example the Ohio case wherein General Motors closed its Lordstown plant … after receiving tens of millions of tax dollars to keep it open. 

Regarding Wisconsin’s Foxconn subsidy, Conyers notes that it came to a million bucks per job. Actually, Stossel corrects, the cost of each Foxconn job was $1.42 million.

Soon the subject shifts to the spectacular subsidies billionaire sports team owners receive for their lavish stadiums. Some folks apparently still think this welfare is an investment that pays off by stimulating greater economic activity. But Stossel points out the stark math: $188 billion in welfare to the wealthy sports moguls and $40 billion back in benefits. 

“The Vikings stadium is so nice,” Bob Fastner deadpans in a comment left at YouTube, “that I can’t afford to go inside.”

“20 years ago, our small town almost subsidized a sports stadium for all the reasons your program described,” offers Friendly One in another comment. “A small independent radio station brought the true financial history of such projects to public awareness, stopped it. It became a thriving business center instead.”

“The politicians don’t call each other out on this and just continue stealing from us,” observes Kiki The Great. “Something all of us can agree on,” comments Mr. Beat. “End corporate welfare!”

Left or right, we don’t support corporate welfare — so why is there so much of it?

This is Common Sense. I’m Paul Jacob.

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Accountability folly free trade & free markets moral hazard national politics & policies porkbarrel politics

Super-​Subsidize Me

welfare, taxes, charity, subsidy, subsidize, shrimp, stadium, Tesla

“In American political discourse, those on the side of the sick, poor, and underprivileged tend to favor more federal government intervention,” writes Heartland Institute policy advisor David D’Amato at The Hill. He explains that many “see government as … rather like a charity …”

Sure, government can act charitably, except that its money isn’t given voluntarily, and the recipients are often not so needy.

Earlier this month, the stock price of electric car company Tesla, Inc. rose high enough to overshadow General Motors. That’s great news for billionaire Elon Musk, Tesla’s CEO. But an Investor’s Business Daily editorial noted, “[T]he company is heavily reliant on taxpayer support.”

Who benefits (in addition to Musk)? “A study published by the National Bureau of Economic Research found that 90% of electric car subsidies go to the top 20% of households,” the editorial stated. IBD added that it was “a lot of welfare-​for-​the-​rich for very little environmental benefit.”

In addition to funding advanced technology, American taxpayers have spent $6.7 billion over the last few decades to subsidize stadiums for wealthy sports team owners. The latest? In Clark County, Nevada, taxpayers forked over $750 million ($354 for every resident) to bribe — er, bring — the Oakland Raiders to Las Vegas. 

The ridiculous Minnesota legislation to feed $5 million in state funds to start two shrimp farms almost seems reasonable in comparison. Almost.

“Maybe growing shrimp in Minnesota is a great idea,” admits John Hinderaker of the Center of the American Experiment. “If so, the owners should do what other small businessmen do: either find investors, or get a bank loan.”

Government’s crony capitalism taxes the poor to give to the rich.

This is Common Sense. I’m Paul Jacob.

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education and schooling folly free trade & free markets national politics & policies too much government

The Truth About Tuition

tuition, supply and demand, subsidy, government

Subsidize something, and you tend to get more of it.

But wait, what if you subsidize demand for something, but don’t really allow (or continue to disallow) increased supply?

Then prices for that something go way up.

This is elementary economics — nothing controversial about it.

Except that politicians and bureaucrats who make public policy tend not to acknowledge this aspect of reality when they propose subsidies. Instead, they expect praise for their “heroic” and “caring” program of destruction.

They need to be educated. But, alas, all this applies best to college education. How does one educate the educators?

A new study, which reliable economists tell me is “sophisticated,” finds that the bulk of recent college tuition price inflation can, indeed, be directly linked to the federal government’s loan subsidies.

This study makes for some opaque reading, alas: “Essentially, demand shocks lead to higher college costs and more debt, and in the absence of higher labor market returns, more loan default inevitably occurs.” Yikes.

The college education bubble has been much talked-​about for years, at least amongst skeptics of government policy. But in hushed tones — the big fear, here, is that a bursting of the bubble will lead to — who knows what? I mean, who-​knows-​what policy reaction.

Probably just more government subsidy and control. And even higher tuition still. Double yikes.

Thankfully, while the brick-​and-​mortar higher education institutions suck up more and more government-​backed money, the Internet is enabling some great alternatives. The future, I think, does not belong to the university system as we have known it.

This is Common Sense. I’m Paul Jacob.

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tuition, supply and demand, subsidy, government

 

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Common Sense general freedom ideological culture national politics & policies

Abort the Subsidy

12 Week old fetus

Common Sense generally steers clear of the abortion issue. Arguably, for “common sense” reasons.

I’ve always been pro-​life, but I’ve also been skeptical of government’s ability to improve the situation, to save unborn lives via the criminal justice system.

No law forces women to have abortions; it’s voluntary. I’ve long hoped that ultrasounds and other technological advances will change hearts and minds, nudging couples to choose to abort less often, making abortion even more rare than when it was illegal. I gladly note that the number of abortions has fallen 12 percent since 2010.

Certainly, I’ve prioritized my political action in a different direction: affecting greater representation, better government, via citizen-​initiated checks on power.

Yet, the recent videos showing doctors and other Planned Parenthood personnel chatting about the sale of fetal body parts implicates a lot more than just abortion. For starters, the footage triggered my gag reflex, and then my sense of justice for the unborn, and sense of decency in the treatment of their remains.

And what about justice and compassion for people deeply offended (myself among them) at being forced to fork over $528.4 million tax dollars each year to an organization performing the most abortions?

Let’s be pro-​choice and abort the taxpayer subsidy to Planned Parenthood.

Those who continue to approve of Planned Parenthood’s work would remain free to support it. Personally. Voluntarily. Likewise, if you revile the organization, you should also be free to not fund it.

Isn’t such respect for each others’ heartfelt beliefs also just common sense?

I think so. I’m Paul Jacob.

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12 Week old fetus

 

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moral hazard subsidy

For Some Reason

Yesterday, the House voted to extend the legal ability for the Export-​Import Bank to run … for another nine months. The people’s legislature passed the “stop-​gap” measure, 319 – 108, with both bipartisan support and bipartisan opposition.

Just last month, President Obama expressed dismay that Republicans would be against it.

“For some reason,” he intoned, “right now the House Republicans have decided that we shouldn’t do this.…” He pretended to incredulity and puzzlement. He gave the usual reasoning for the subsidized financial guarantees, and insisted that “every country does this.”

“When,” he asked, “did that become something that Republicans opposed?”

Obama could’ve asked all those members of his own party who opposed it.

But then, he could have asked himself. Back in 2008, he very clearly put the Ex-​Im Bank on the theoretical chopping block. Candidate Obama gave the big business bank up as a program that “didn’t work” and one that had become “little more than a fund for corporate welfare.”

So why the change of mind, Mr. Obama?

Has the Ex-​Im ceased being a fund for corporate welfare?

No. It’s still there, propping up big businesses doing business abroad — indeed, multinationals abroad, the kind of companies that Obama’s Occupier friends despise so deeply.

What has changed? He’s in power, now. And that power derives from the mighty federal purse, filled by taxing hundreds of millions of Americans, and used to give hundreds of millions and billions in benefits to the few, the insiders.

President Obama and the congressional leadership of both parties are tighter than ever with special interests.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies too much government

Corn Subsidies Fail Big

America has a problem: obstinate politicians, the Obstinacy in Chief, especially.

Almost any policy high-​lighted at some point in the last few years could serve as an illustration of this point, but let’s choose the once-​popular “green” pro-​ethanol policies.

George W. Bush pushed ethanol, and Barack Obama doubled-​down on the subsidy, making it a centerpiece for his low carbon-​footprint notion.

It has not worked.

What it has done is create what environmentalists are now calling “an ecological disaster.”

How?

It created a land rush that swallowed vast tracts of land sporting alternate uses, including millions of acres of conservation land, including wetlands. And the huge amounts of insecticide and fertilizer used in the effort have poisoned wells and water supplies as well as rivers and the Gulf of Mexico.

All to plant more corn than the market demands.

But is it doing what the government wants, and Obama demanded — the whole reason for this goofy program after all?

“The government’s predictions of the benefits have proven so inaccurate,” write Dina Cappiello and Matt Apuzzo for the Associated Press, “that independent scientists question whether it will ever achieve its central environmental goal: reducing greenhouse gases. That makes the hidden costs even more significant.”

Over-​production, higher costs, externalized burdens — typical for a government subsidy. But what can we do about it?

In early 19th century Britain, Richard Cobden and John Bright started the Anti-​Corn Law League, which successfully opposed the biggest protectionist program of the age. We could use another such vital force, this time to oppose the idiotic subsidies that raise food prices internationally as well as wreak havoc on land in the Mid-West.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets national politics & policies too much government

Affordable [sic] Healthcare [sick]

The Pelosi-​Obama Affordable Care Act was passed as a pig-​in-​a-​poke. Now with that poke open, with the pig fully emergent as of next year, what do we know about “Obamacare”?

  1. It’s not socialized medicine, but it is heavily regulated- and subsidized-​medicine, almost designed not to work. Its inevitable failures will be said to require more government as “fixes,” eventually (some Democrats hope) going all the way to, yes, socialized medicine.

  2. It’s chockfull of new subsidies, which raise medical costs by making demand for services even more inelastic … and thus can only increase taxpayer burdens and more strain on budgets. The original reason so many Americans opposed the reform was that promoting a new “entitlement” even as the old entitlements of Social Security and Medicaid teetered further into insolvency was the very opposite of common sense.
  3. It’s filled with new “mandates” at every level, for businesses as well as individuals. A few have been postponed, but the bulk of the increased regulations are indeed going into effect next year. That will generally raise prices.

But by how much? Well, a new all-​state study predicts that

insurance premiums will increase under the first year of Obamacare in 45 of 50 states. This finding flies in the face of President Obama’s promise that his health care overhaul would cause premiums “for the typical family” to fall by $2500.

Why the decrease in five states?

Those had already embraced the goofy over-​regulations that Democrats just seem to love.

This is Common Sense. I’m Paul Jacob.