To the Editor: Cuts to poor continue, but corporate welfare untouched
Written by V.N. Krishnan   
Friday, 25 October 2013 10:09
For quite some time we have heard loud calls for budget cutting on entitlements and now on food stamps, head start and TANF (Temporary Assistance to Needy Families). But nothing is said about its counterpart, "corporate welfare" (CW), a term first popularized by Ralph Nader in 1956. It refers to government's bestowal of grants, tax breaks, trade protection and other special favorable treatment for corporations that have come to be known as crony capitalism. There is no good scientific measure of CW as the handouts are not transparent and can hardly be discerned by studying the Federal Budget Outlays. One has to depend on studies made by independent scholars and Institutes of Research.
Daniel Huff of Boise State University in a comprehensive study in 1993 estimated CW at $170 billion as of 1990. We spent $11 billion on Aid to Dependent Children and $30 billion on Medicaid or half the amount corporations got each year in tax breaks. Allen Peters and Peter Fisher of the University of Iowa in 2004 found that state and local governments provided CW to the tune of $40-50 billion annually. Cato Institute reported that U.S. Fiscal Policy in 2006 allocated $92 billion for CW while $59 billion on traditional social welfare programs. So it spent a little less than 50 percent on food stamps and housing assistance than on CW. Recently the Institute came up with the figure of $100 billion for CW in 2012. Generally CW has ranged between 5 to 8 percent of the Federal Budget while it has been less than half of that for really needed social programs.
Space does not permit me to elaborate about arguments on both sides of the welfare debate. But research shows that a lot more abuses are found in CW that has actually led to more hardships for the poor and the lower middle classes than can be found in the case of social welfare expenditure. That CW has led to "socialism for the rich and capitalism for the poor" is not an idle statement. Instead of free enterprise we now have a free for all enterprise where the winner takes all. With CW corporations can privatize profit and socialize loss.
Classical economist Adam Smith observed that everywhere civil laws were passed by the rich to protect themselves from the poor. The poor never get to pass laws.  
V.N. Krishnan
Bowling Green
 

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