Americans See Value of Free-Market Due to Corporate Welfare Waste
June 15, 2015
As trust in government declines, Americans' perception of government waste has increased along with government spending.
High perceptions of government waste and low levels of trust are in part a result of Americans recognizing the federal government does too many things that would be done better by individuals or businesses in the private sector, by state and local governments, or that should not be done at all. Moreover, bank and auto industry bailouts and massive government handouts to well-connected business as part of the so-called stimulus conveyed to Americans in no uncertain terms that corporate welfare and cronyism are rampant in the federal government.
Here are several examples of corporate welfare programs Congress should eliminate:
- Export-Import Bank. Although proponents claim the bank aids small businesses and creates jobs, just ten companies were the beneficiaries of 64 percent of Ex-Im subsidies in 2013, including Boeing (30 percent), General Electric (9.5 percent), Bechtel (6.6 percent), and Caterpillar (4.9 percent).
- The Overseas Private Investment Corporation (OPIC) is the government agency that promotes investment in developing countries. OPIC provides loans and loan guarantees; subsidizes risk insurance against losses resulting from political disruption, such as coups and terrorism; and capitalizes investment funds. OPIC subsidizes private risk and puts taxpayers on the hook for this exposure, similar to the Export-Import Bank.
- Amtrak is a money-losing entity addicted to corporate welfare subsidies. Last year Amtrak's net losses totaled almost $1.4 billion, including an operating loss of almost $227 million.
Corporate welfare and crony capitalism are reflected both in backroom deals in which a small group of individuals influence legislation or regulation to benefit a narrow interest at the expense of the broader public and in the establishment of government programs that purport to serve broader noble goals but divert resources away from the wants and needs of consumers and toward political purposes.
Source: Romina Boccia, "Corporate Welfare Wastes Taxpayer and Economic Resources," Heritage Foundation, June 10, 2015
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