Undeclared State of Welfare

The problem is that an attack on one family's livelihood is another family's food, clothing and shelter. Choose wisely...

According to one Paul Buchheit, the average American household subsidizes corporate interests to the tune of $6,000 a year. Now, for the record, I can't speak to the accuracy of this information. There are links in the article, but since it's somewhat secondary to the point that I'm about to make, I didn't check them all out. So this may be correct, or it may not.

But, for the moment, let's assume that we are shelling out, as a nation, somewhere in the area of $688,568,154,000 per year to float "corporate fat cats," as so many people like to call them. The question isn't, for most of us, whether this is right or wrong, but whether we are getting a reasonable return on that investment. Now, the default assumption is that since this is money that we don't need to spend, there is effectively no return. And for the majority of us, that's likely more or less correct. But, obviously, someone's getting that money - it's unlikely that most of the corporate recipients of the cash are simply sitting on it and not doing anything useful with it.

And here's where things become dicey. Some of the people who are receiving a slice of this money are everyday people. Suppose that through a sudden Congressional revolt (or attack of good sense, take your pick) all of these subsides were to vanish - tomorrow. What would the companies do? It's easy to talk about "corporations that have doubled their profits" in the aggregate, but I would actually be surprised to find that all of the corporations that were benefiting from this would actually be profitable without it. So it's likely that some of them would close, and likely jobs would go away. You could make the point that if every family had an extra $6,000 to spend, that other companies would move into the void. And that's likely true. But. There are a few factors to take into account. Some of that money would be spent on exports, and go overseas. Some of that money would go into bidding up the price of assets - it would go into someone's pockets, but wouldn't necessarily create jobs. And some of that money would go into bank accounts and under mattresses (or to pay debts), and thus be unavailable to be paid out in wages, in whole or in part.

And so it's likely that the removal of the nearly $700 billion in subsidies would result in some subset of the population losing some or all of their current income, and having poor prospects to immediately replace it. And those people would be very motivated to make common cause with "the 1%" to preserve their incomes. And help them in making other people fear for their incomes. And that's really what's at stake here. While segments of the Right and the Left may ally with each other to decry Crony Capitalism, it's the middle that sees a benefit in these subsidies - or at least fears feeling the pain if they're ended. Most people don't make deals that hurt them in the long run because they're stupid - they make them because they can't afford to walk away from them in the short run. Ending policies that effectively result in Corporate Welfare requires giving people that freedom to walk away, and not starve because of it.

So it won't be a question of whether or not we all pay the $6,000 per household - just a matter of who cashes the checks.