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Cutting Corporate Welfare Queens Off from the Dole Would be the Best Way to Cut the Debt

George Washington's picture




 

TOO BIG TO JAIL DOUCHE BAGImage by William Banzai

In previous installments, we’ve noted that we could more than offset the need for the “sequestration” budget cuts by doing any one or combination of the following:

Here’s another way to offset the need for budget cuts: cut off the welfare queens. (Jamie Dimon – shown above- and the other Wall Street queens are the largest recipients of welfare.)

Liberals and conservatives agree that we should stop subsidizing the fatcats. For example, the conservative Cato Institute points out that corporate welfare amounts to almost $100 billion per year. Cato notes:

Corporate welfare often subsidizes failing and mismanaged businesses and induces firms to spend more time on lobbying rather than on making better products. Instead of correcting market failures, federal subsidies misallocate resources and introduce government failures into the marketplace.

 

While corporate welfare may be popular with policymakers who want to aid home-state businesses, it undermines the broader economy and transfers wealth from average taxpaying households to favored firms.  Corporate welfare also creates strong ties between politicians and business leaders, and these ties are often the source of corruption scandals in Washington. Americans are sick and tired of “crony capitalism,” and the way to solve the problem is to eliminate business subsidy programs.

Cato also notes:

The federal government continues to subsidize some of the biggest companies in America. Boeing, Xerox, IBM, Motorola, Dow Chemical, General Electric, and others have received millions in taxpayer-funded benefits …. In addition, the federal crop subsidy programs continue to fund the wealthiest farmers.

(Indeed, the Federal Reserve threw money at hedge funds, McDonald’s, Harley-Davidson, “several billionaires and tens of multi-millionaires”, including  Christy Mack, the wife of Morgan Stanley’s John Mack, billionaire businessman H. Wayne Huizenga, and Michael Dell, co-founder of Dell Computer, hedge fund manager John Paulson and private equity honcho J. Christopher Flowers.)

The liberal Huffington Post reports that corporate welfare dwarfs individual welfare:

Welfare Spending Nearly Half What U.S. Forked Out In Corporate Subsidies In 2006: Study

 

Welfare queens may actually look more like giant corporations.

 

***

 

Charles Koch, the CEO of Koch Industries, argued in a Wall Street Journal op-ed earlier this month that crony capitalism is a “destructive force” for business and government. [Both conservatives and liberals hate crony capitalism.]

Conservative Senator Tom Coburn has documented that many wealthy and famous people receive huge tax and other subsidies.

The liberal New Yorker magazine notes:

In recent decades, what you could call the corporate welfare state has become bigger. Energy companies lease almost forty million acres of onshore land in the U.S. and more than forty million offshore, and keep the lion’s share of the profits from the oil and natural gas that they pump out.

 

***

 

In 1996, for instance, the government temporarily lowered royalties on oil pumped in the Gulf of Mexico as a way of encouraging more drilling at a time of low oil prices. But this royalty relief wasn’t rescinded when oil prices started to rise, which gave the oil companies a windfall of billions of dollars. Something similar happened in the telecom industry in the late nineties, when the government, in order to encourage the transition to high-def TV, simply gave local broadcasters swathes of the digital spectrum worth tens of billions of dollars. In the mining industry, meanwhile, thanks to a law that was passed in 1872 and never rewritten, companies can lease federal land for a mere five dollars an acre, and then keep all the gold, silver, or uranium they find; we, the people, get no royalty payments at all. Metal prices have soared in the last decade, but the only beneficiaries have been the mine owners.

 

***

 

U.S. sugar companies benefit from the sweetest boondoggle in business: an import quota keeps American sugar prices roughly twice as high as they otherwise would be, handing the industry guaranteed profits.

The tax code, too, is a useful tool for helping businesses. Domestic manufacturers collectively get a tax break of around twenty billion dollars a year. State and local governments give away seventy billion dollars annually in tax breaks and subsidies in order to lure (or keep) companies. The strategies make sense for local communities keen to generate new jobs, but, from a national perspective, since they usually just reward companies moving from one state to another, they’re simply giveaways.

A New York Times investigation found that the number is even larger:

A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.

 

The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards.

 

***

 

A portrait arises of mayors and governors who are desperate to create jobs, outmatched by multinational corporations and short on tools to fact-check what companies tell them. Many of the officials said they feared that companies would move jobs overseas if they did not get subsidies in the United States.

 

***

 

For many communities, the payouts add up to a substantial chunk of their overall spending, the analysis found. Oklahoma and West Virginia give up amounts equal to about one-third of their budgets, and Maine allocates nearly a fifth.

 

***

 

Nationwide, billions of dollars in incentives are being awarded as state governments face steep deficits. Last year alone, states cut public services and raised taxes by a collective $156 billion ….

But this isn’t just a state issue. As the Times notes, “20 percent of state and local budgets come from federal spending.”

The New Yorker continues:

More subtly, government boosts business profits via regulation. The most obvious example, perhaps, is the banking industry. The F.D.I.C. encourages people to deposit money in banks, and the biggest banks also benefit from the perception that the government will not allow them to fail, which enables them to borrow money at a low cost. Another leading beneficiary of regulation is the ethanol industry, a sacred cow of American politics. The government requires refiners to blend billions of gallons of ethanol into gasoline annually, and hands out an ethanol tax credit. As a result, forty per cent of corn acreage in the U.S. now goes to make ethanol. This jacks up food prices, since less corn is grown for feed and table, and the environmental benefit is dubious. But farmers and refiners benefit enormously, so the mandate stays in place.  [Treehugger notes that - as of 2007 - 76% of all federal renewable energy support went to ethanol.] Vested interests of this kind also explain why so many states have onerous licensing regulations; Florida says that you need six years of training and apprenticeship to become an interior designer. Such regulations, which have grown precipitously in recent decades, are catnip to incumbent businesses worried about competition.

 

Perhaps the biggest boon that the government offers business is the benefit of copyright and patent protection. As the [liberal] economist Dean Baker shows in his book “The End of Loser Liberalism,” patent protection is worth hundreds of billions of dollars a year to the drug industry alone. And while most of us would find it hard to imagine doing without copyrights and patents, that doesn’t justify the huge expansion of intellectual-property rights we’ve seen of late: the length of copyright has been expanded eleven times since 1962, and the range of things that can be patented has increased hugely, even in areas where, as [conservative, free market advocate] Judge Richard Posner recently argued, there’s little or no economic benefit to society.

Forbes’ Doug Bandow – a conservative from the Cato institute – notes:

Most politicians want to cut the federal budget in theory. Few want to cut it in practice. So it is with corporate welfare, which is enthusiastically supported by Democrats and Republicans alike.

 

***

 

Among the most outrageous expenditures is corporate welfare. Desperate businesses now overrun Washington, begging for alms. Believing that profits should be theirs while losses should be everyone else’s, corporations have convinced policymakers to underwrite virtually every industry: agriculture, education, energy, housing, manufacturing, medicine, transportation, and much more.

 

***

 

Cutting business subsidies would be a good start to balancing the budget. Moreover, going after corporate welfare is essential to create a budget package that the public will see as fair. Corporate welfare reflects politics at its worst.

For example:

The largest single source of business subsidies is the Department of Agriculture, with $25.1 billion. For the most part crop payments go to large farmers, who are big businessmen.

Bondow notes that – notwithstanding mainstream Republican party rhetoric – narrowly-drafted tax loopholes are a form of subsidy:

Spending is the most obvious but not only form of corporate welfare. Tax preferences, often called “tax expenditures,” are the functional equivalent of direct outlays. Failing to tax is not the same as spending, since all income does not belong to the government. However, when the government provides a narrow exemption from general tax obligations it essentially is writing a check. While appropriations have some level of transparency, tax preferences often are obscurely drafted and dropped into larger bills, hidden from public view. Taxpayers then are unaware that they are being looted.

He also notes the hypocrisy of Republican politicians who talk about the free market, but enthusiastically dole out corporate pork:

The greater outrage is support for corporate welfare from the Right. Political conservatives wax poetic about the virtues of the free market, but conservative office-holders often are pro-business rather than pro-market.

Liberal writer Matt Stoller notes:

Here are eight corporate subsidies in the fiscal cliff bill that you haven’t heard of.

 

1) Help out NASCAR - Sec 312 extends the “seven year recovery period for motorsports entertainment complex property”, which is to say it allows anyone who builds a racetrack and associated facilities to get tax breaks on it. This one was projected to cost $43 million over two years.

 

2) A hundred million or so for Railroads - Sec. 306 provides tax credits to certain railroads for maintaining their tracks. It’s unclear why private businesses should be compensated for their costs of doing business. This is worth roughly $165 million a year.

 

3) Disney’s Gotta Eat - Sec. 317 is “Extension of special expensing rules for certain film and television productions”. It’s a relatively straightforward subsidy to Hollywood studios, and according to the Joint Tax Committee, was projected to cost $150m for 2010 and 2011.

 

4) Help a brother mining company out – Sec. 307 and Sec. 316 offer tax incentives for miners to buy safety equipment and train their employees on mine safety. Taxpayers shouldn’t have to bribe mining companies to not kill their workers.

 

5) Subsidies for Goldman Sachs Headquarters – Sec. 328 extends “tax exempt financing for  York Liberty Zone,” which was a program to provide post-9/11 recovery funds. Rather than going to small businesses affected, however, this was, according to Bloomberg, “little more than a subsidy for fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp.” Michael Bloomberg himself actually thought the program was excessive, so that’s saying something. According to David Cay Johnston’s The Fine Print, Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds.

 

6) $9B Off-shore financing loophole for banks – Sec. 322 is an “Extension of the Active Financing Exception to Subpart F.” Very few tax loopholes have a trade association, but this one does. This strangely worded provision basically allows American corporations such as banks and manufactures to engage in certain lending practices and not pay taxes on income earned from it. According to this Washington Post piece, supporters of the bill include GE, Caterpillar, and JP Morgan. Steve Elmendorf, super-lobbyist, has been paid $80,000 in 2012 alone to lobby on the “Active Financing Working Group.” 

 

7) Tax credits for foreign subsidiaries –  Sec. 323 is an extension of the “Look-through treatment of payments between related CFCs under foreign personal holding company income rules.” This gibberish sounding provision cost $1.5 billion from 2010 and 2011, and the US Chamber loves it. It’s a provision that allows US multinationals to not pay taxes on income earned by companies they own abroad.

 

8 ) Bonus Depreciation, R&D Tax Credit – These are well-known corporate boondoggles. The research tax credit was projected to cost $8B for 2010 and 2011, and the depreciation provisions were projected to cost about $110B for those two years, with some of that made up in later years.

And as conservative Congressman Chuck Grassley (R-IA) said of defense contractors in 1986:

They are the new welfare queens, isolated from competition and the consequences of their mistakes and with the government always ready to bail them out....

Here are some specific examples of welfare handouts to defense contractors, which total many hundreds of billions  per year.

And see this and this.

 

 

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Thu, 03/14/2013 - 12:02 | 3329649 hyperbole2000
hyperbole2000's picture

 

0% income tax and a 20% sales/service tax. To save merely stop disposable income spending. Business challenge: reduce cost and improve quality to entice consumption rather than provide high risk consumer credit to buy plastic crap from overseas. The ultra-wealthy would pay higher accumulated taxes for maintenance of their stuff. For example wealth management fees. If you earned it you can likely manage it with minimal service costs.  If you inherited you may incur higher management unless your parents prioiritized transfer of the wealth management skills along with the weslth. Today only Old Money, our leaders, (dont deny it) only need lobbying skills which lying deceitful crooks can excel at. If you want to improve our leadership improve the regutory framework for wealth management.  The competitve and skiled members of the Old Money would rise to the top rather than the deceiptful liers.

Fri, 03/15/2013 - 00:57 | 3331700 moneymutt
moneymutt's picture

Come on, if you are only going to tax one thing, make it property. check out Georgism, libertarian Geoism

Fri, 03/15/2013 - 00:57 | 3331699 moneymutt
moneymutt's picture

Come on, if you are only going to tax one thing, make it property. check out Georgism, libertarian Geoism

Fri, 03/15/2013 - 00:57 | 3331698 moneymutt
moneymutt's picture

Db

Thu, 03/14/2013 - 10:59 | 3329494 WTF_247
WTF_247's picture

Politicians want to get re-elected.  Politicians want money/donations.  They will NEVER cut off the hands that feed them.  

 

Legalized bribery and paybacks.  Setting themselves up for cushy jobs after office through corp welfare as well.  Good luck getting it to stop.

Thu, 03/14/2013 - 10:59 | 3329492 rsnoble
rsnoble's picture

This article has it all wrong.  Everyone knows it's grandmas, unemployed and the disableds fault.  Just read the news.  Idiots.

LOL.

Thu, 03/14/2013 - 10:10 | 3329327 Sigep0612
Sigep0612's picture

What's the point?   We all can comment but the reality is someone, some group, or collective groups needs to creative "Civil disobedience" in order for things to change.  We've got Ryan who proposes a budget that he even admits needs to be changed.  We've got a President who tells ABC that he has not intention ofcreating a balanced budget. 

Really...what's the point of all of our emotional drivel.     

Thu, 03/14/2013 - 10:17 | 3329341 The Heart
The Heart's picture

"or collective groups needs to creative "Civil disobedience" in order for things to change."

Who ever fires the first shot in the coming revolution will be the loser. When the babylonians hit that button as is expected, all Hades will break loose. Everybody knows who the enemies are.

http://www.youtube.com/watch?v=yG5e1oaen-M&feature=related

Thu, 03/14/2013 - 09:17 | 3329218 Whoa Dammit
Whoa Dammit's picture

How many of these corporations could even exist without their government subsidies? I suspect it is most of them. (I am not talking about the obvious TBTF banks, auto makers, and government arms suppliers, but of other industries.) If they can't make it on their own, why should we have to pay for them to stay afloat? It's a grossly inefficient way to run an economy and rivals the former USSR in stupidity.

 

 

Thu, 03/14/2013 - 11:45 | 3329633 the grateful un...
the grateful unemployed's picture

we continue to support them because they keep profit margins down, and allow consumers to get the lowest price (stated mission of walmart) we live in an anticapitalist economy, where amazon loses money on every item they sell, but they can sell more than any other retailers (quote from a few years back) market share, eyeballs if you're an internet service, are more important than profits. facebook has no stream of income other than advertising. to answer your question, yes its inefficient and walmart is the old GUM (USSR) or peoples store, which has a certain nostalgia. the real question is whats next.

Thu, 03/14/2013 - 10:06 | 3329320 Axenolith
Axenolith's picture

In the mining industry, meanwhile, thanks to a law that was passed in 1872 and never rewritten, companies can lease federal land for a mere five dollars an acre, and then keep all the gold, silver, or uranium they find; we, the people, get no royalty payments at all. Metal prices have soared in the last decade, but the only beneficiaries have been the mine owners.

While I agree with the overall article, the mining law portion is a bullshit canard that gets repeatedly trotted out in an attempt to increase government control over western lands and secure large corporation holdings from, among other things, the "risk" that joe bob will stumble across something good or catch them off guard and stake a paying claim.

Deconstructing the fallacious numeric arguements (the jist of which is that most list the estimated value extracted in the last ~140 years without any consideration of cost or the orders of magnitude higher number of folks/companies who "lost their asses") against mining law is to much for me to go into this morning, but from the standpoint of the "little guy" (of which I am one, a geologist, and I prospect for stuff as a hobby) the changes proposed in the past to mining law would have been, and will be a disaster.

As it stands now, a small miner/prospector still has a relatively unfettered ability to stake small claims and exploit them without needing X millions of dollars in financial backing.  Any of these proposed policy changes always end up placing the western mineral estate (which 1866 and 1872 mining law actually transferred to the American people) firmly in the hands of the crony capitalist structure and make it essentially impossible for the individual to partake in the adventurous hunt for mineral wealth that defined the western United States. 

 

Thu, 03/14/2013 - 11:46 | 3329640 the grateful un...
the grateful unemployed's picture

so why aren't we doing this?

Thu, 03/14/2013 - 08:49 | 3329165 madcows
madcows's picture

Whatever happened to just regulating interstate trade and providing national defense?

I want to go back to being independent states.

Thu, 03/14/2013 - 11:47 | 3329643 the grateful un...
the grateful unemployed's picture

what you don't like the Obama-states of America?

Thu, 03/14/2013 - 08:38 | 3329150 blindman
blindman's picture

The Beatles - 'You got to hide your love away' music video
http://www.youtube.com/watch?feature=endscreen&v=jz7IjXu0DfQ&NR=1
.
still, after all this time, we don't recognize money for what it is.
.
The Beatles - The Long And Winding Road-HQ
http://www.youtube.com/watch?v=x6AuKENgmLQ

Thu, 03/14/2013 - 08:34 | 3329143 blindman
blindman's picture

it is all an elaborate farce designed to capture the imagination to cover over
the fact that the money system is a debt master/slave system whereby
the masters own the purchasing power of the slaves. there is no money
other than that associated with some slaves debt and when this becomes
unpayable the debt is transferred to the / a sovereign so as to not
wipe out the wealth of the master class. the game is on to steal by this
or other securities fraud transfer schemes all pools of "wealth", securities
of greater integrity than those by which they will be replaced/stolen,
and there is no prosecution of the theft.
.
to cover up the systemic crime of design they have embraced the
solution of turning the entire world into an uncontrollable crime
scene and then will march us into world war, all to steal control
of debt or money and "treasure", to further control the sovereign
treasuries. they will say it is about something else.
.
theft and fraud have been
normalized in the debt-money scam paradigm. the beautiful thing is it
is all an illusion and a lie whose only life is provided by the breath of
the terminally and willfully ignorant an the sheeple. the wolves that tend
them and feed on them are another story but with such cozy arrangements
even these wolves become like dogs over time, another silver lining!
.
a jubilee wipes out the debt which is the "wealth" of the master class
in a debt based system. both the debt and the wealth or ownership of that
debt are fraudulent. that is the problem and crime, and it must be prosecuted
by default and collapse of the malinvestment, misallocation, mastication and
masturbation of influence and power that issues from it's survival.
never mind the energy that is required to fight the stupidity in high places.
imho

Thu, 03/14/2013 - 07:56 | 3329077 WTFUD
WTFUD's picture

Think Amazed! These leachy dirty thieving bastards not only fuck you but they and a few ponces on here tell you the fucking is in your best interests.
The former "socialist" PM of Greece ( GP) has his Arse kicked out the door in hours ( 500 million revolving door ) to be replaced by unelected technos who Wave an unlawful injunction ( obviously from a judge who must hang later ) denying the dying Greek people Access to the Goldman Deal signed on their behalf. Now how "fucked up " are We Allowing BS exchanges regarding fucking Taxation to Waste the Real Must Solve First Issues like HANGINGS?

Thu, 03/14/2013 - 06:46 | 3329017 q99x2
q99x2's picture

No need to beat around the bush. The states should cut off Washington D.C. and create a new Federal Government based on the Constitution of the Untied States of America.

Thu, 03/14/2013 - 10:01 | 3329296 sessinpo
sessinpo's picture

I agree except I would like a Constitution tha explicitly states what the Federal Government can and can't do.

 

For example, I would want the Constitution to state plainly that the Federal Government is not to be involved with any social programs such as retirement, or health care.

 

Quite frankly, I would also like to add term limits to all elected positions. All positions to be part time  (serving 1 month a quarter) with no benefits and a salary of the Federal minimum wage.

Thu, 03/14/2013 - 04:59 | 3328951 Coldfire
Coldfire's picture

Happy to say that I no longer pay any US tax. I don't understand how people put up with having over 50% of their production routinely stolen from them and consider themselves to be free. They are tax slaves. Literally. Land of the Free? What a fucking joke.

Thu, 03/14/2013 - 10:39 | 3329420 Papasmurf
Papasmurf's picture

Happy to say that I no longer pay any US tax.

You're still paying tax through lost purchasing power caused by Bernanke & Co. who exports the money printing globaly.  Where did you find a place to hide where you are not disadvantaged by this?

Thu, 03/14/2013 - 07:49 | 3329068 Ace Ventura
Ace Ventura's picture

Like many others here, I'd love to know how you managed to 'no longer pay any US tax.' If you moved to another country and adopted another citizenship that's one thing (although I imagine in that event you substituted one tax system for another).......but if you still live in the USSA and managed this feat, inquiring minds would love to know how. From my perspective they have direct access to your pay and can loot the funds up front before you ever see them. Sure, you can tweak your exemptions in such a fashion that you end up keeping your entire paycheck....but then there's that nasty annual requirement to file a tax return, wherein such a tweak is unraveled and Uncle Sugar gets to loot you anyway....unless of course you're willing to falsify data and risk prison time, or unless you're a member of TBTF/TBTJ Cool Kids Club (in which case there is no real risk to falsifying data).

 

Thu, 03/14/2013 - 03:03 | 3328859 The Heart
The Heart's picture

Thank you brother GW for your tireless research and great reporting on the insanity of the unreality.

The light...she's a shining brightly...the ignorant are on the run...truth marches on...the hundredth monkey swings his two balls and Cain.

You are highly appreciated and will go into history as one of the great Info-warriors of our time.

Ignorance is not my Master...it is my slave.

Thu, 03/14/2013 - 07:06 | 3329024 falak pema
falak pema's picture

On ignorance and the circular economy :  a look at a Paradox ingrained in the practice of this elusive science called Ecnonomia; by a much decried philosopher who marked his age; even today, albeit by those who hijack his theory to hide the barren, rampant oligarchy facts in "statist clothes", so prevalent today : 

Paradox of thrift - Wikipedia, the free encyclopedia

and this comment (not mine), just saying :

 

Keynes' General Theory as fleshed out by Hyman Minsky is the best theory IMHO. Under this interpretation, Keynes rejected the concept of equilibirium in unregulated markets that is the cornerstone of Neo-Classical economics. Instead, under this interpretation of Keynes, a capitalist economy has inherent flaws.

In this theory, the finance sector serves as the driving force of the economy through its creation of credit. The instability occurs when expectations of never ending increases in asset prices are fueled by a finance sector extending credit that creates a bubble of rising asset prices rising on a mountain of debt(credit). Eventually the income stream needed to keep the debt recycling can not be maintained. The rise was created by leveraging of assets by debt and not by real creation of wealth. Economic actors start selling assets to raise income and start to realize the asset values were based more on debt expansion than real increases in economic productivity. A crash occurs and banks slash credit and try to raise capital resulting in a collapse in private credit creation. NO EQUILIBRIUM will save us. Instead, in these situations, the government is the only economic actor than come in to supply credit and demand.

The Neo-classical theory can not explain why markets can fall without limit. Equilibrium is not the dominant force in the real world. Only Keynes' theory explains this.

And, as its only fair, the "best" rebuttal I found of this "dismal science" here : 

Austrian Economics Is Scientific (Keynesianism Is Not) | Peace . Gold . Liberty

Now you decide between legend and fact; like who killed Liberty Valance! 

Good luck with that! lol.

Meanwhile, back in the real world, far from the madding crowd of Forum debate, we get a glimpse of Oligarchy reality in the making : 

Cambodge: les salaires désespérément bas des ouvrières du textile

Thu, 03/14/2013 - 01:57 | 3328820 snblitz
snblitz's picture

I wish georgewashington would read the responses to his postings here at zerohedge.

Then he might possible write something worth reading.

Thu, 03/14/2013 - 11:16 | 3329528 DaveyJones
DaveyJones's picture

of course, that rule can apply to those who comment...

Thu, 03/14/2013 - 00:19 | 3328681 Walt D.
Walt D.'s picture

BULLSHIT.

We need to trim spending by $1.2 trillion a year just to get the budget to balance. Currenly we are adding $100 billion a month to the debt.

The only way we will ever cut the debt is if we repudiate it.

Thu, 03/14/2013 - 00:29 | 3328703 Seer
Seer's picture

Well... $780 billion would make a dent, but, there's still the little issue of existing debt.  I think that we're just making a bunch of noise until this thing completely, and utterly, collapses.  It's basically MATHEMATICALLY IMPOSSIBLE to clear all the debts and deficit spending, in which case you are completely right- only repudiation will clear the books (but this create a lot of spilled blood).  AND even then we're looking at a massively detuned "economy," a FAR lower "standard of living."  It was always the consequence of perpetual growth on a finite planet....

Thu, 03/14/2013 - 11:46 | 3329641 Walt D.
Walt D.'s picture

" It's basically MATHEMATICALLY IMPOSSIBLE ".

This is because of the Orwellian doublespeak that politicians use. To them a cut is not defined as a decrease, but a decrease in the rate of increase. So if an 8% per year increase is built in, reducing it to 7.5% is defined as a cut. Nobody is proposing an actual cut. Therefore the debt will continue to grow. In fact we are in a debt bubble - the growth of the debt is super-exponential. (In non technical terms, what this means is that the number of months it takes for the debt to double is getting smaller and smaller with time.)

Needless to say all bubbles of this type have always ended in a collapse of the currency.

However, this time it is going to be different! :-)


Wed, 03/13/2013 - 23:19 | 3328543 the grateful un...
the grateful unemployed's picture

oh hell, you mention only what happens at the Federal level, while at the state, county and city level corporate welfare thrives while basic services are denied citizens. among the prime offenders are owners of professional sports franchises, which get taxpayer money for new stadiums built to increase the value of their franchise without any cost to them. this is why SCOTUS wrote emminent domain, to further the corporate agenda in america. jeez GEO this is just part one of the series. this is why small business is bankrupt so wall street corporations can borrow money for nothing to buy back their shares and leviatate the stock market

Wed, 03/13/2013 - 23:14 | 3328539 Fedaykinx
Fedaykinx's picture

all of the leeches should be cut off.

Wed, 03/13/2013 - 22:47 | 3328449 earnyermoney
earnyermoney's picture

LOL, I'll bet Patty Murray gives George some wood. She revealed the Red teams budget in the Senate today. Increase federal spending by 62% over the next decade.

Thu, 03/14/2013 - 11:57 | 3329665 Walt D.
Walt D.'s picture

This would be funny if it were not tragic.

 

Wed, 03/13/2013 - 22:13 | 3328347 StarTedStackin'
StarTedStackin''s picture

KISS MY ASS!

 

 

Unless actual welfare spending is less

Wed, 03/13/2013 - 21:57 | 3328307 Ned Zeppelin
Ned Zeppelin's picture

Good work George as usual

Wed, 03/13/2013 - 21:27 | 3328218 Maos Dog
Maos Dog's picture

 

George, this is your shittiest and least researched article I think I have ever seen. 30 seconds of research on the internet is enough to totally blow this article. You can't pass shit like this off on us.

Seriously, this line here:

"The liberal Huffington Post reports that corporate welfare dwarfs individual welfare:"

and

"For example, the conservative Cato Institute points out that corporate welfare amounts to almost $100 billion per year. Cato notes:"

You fucking kidding?

 

Here are some example numbers:

 

Medicaid: 500 Billion a year

Section 8: 34 Billion a year

Food Stamps: 60 Billion a year 

 

SSN + Medicaid + Medicare + Welfare is well over 1 trillion. 

Individual Welfare VASTLY EXCEEDS ANY OTHER GOVERNMENT SPENDING, INDLUDING DEFENSE. Look at the budget!!!

Do I even need to continue??? 

 

Thu, 03/14/2013 - 11:33 | 3329583 Maos Dog
Maos Dog's picture

Wow, the responses to my posts are just crazy!

Read the article again, *slowly* guys, reading comprehension is your friend!! 

This article talkes about budgeted amounts, and lists on-budget government programs. It doesd not talk about off-budget Fed programs, derititives, or othert issues that responders have brought up. You are making arguments thtat do not appear in the article, and making the authors arguments for him, which, if the article wasen't shit, you would not have to. About these off-budget programs, yes, you all have a point of course, but, that's *not* what this article is about. The article is clearly about these on-budget items, becuase otherwise why ever bother to mention something like sugar subsidities, which are like 45 million a year, when the Fed prints 80 billion a month?

This article implies that all of our budget problems would be over if we just cut corporate welfare, which, of course is bullshit. On-budget corporate welfare, as quoted in the article is 100 billion, I think the (un-official on-budget number) is closer to 250 billion, Welfare spending is well over 1 trillion dollars. The insane individual welfare spending is just as damaging and morally wrong as the corporate welfare, for mal-investment reasons, moral hazzard reasons, health reasons, and other reasaons that escape me right now.

 

Thu, 03/14/2013 - 11:12 | 3329520 madcuban
madcuban's picture

finally someone who agrees with what ive been saying for a while.   he doesnt research or even check for common sense.  98% of that article was quotes from other articles and blogs.  sure, the premise is overall correct.  stop favoring corp cronies.  no shit sherlock.  he is a supermarket tabloid article churning machine.  i really do wish he would write something original, but instead all we get are copies and pastes and a no brainer conclusion.  nothing new to see here.  please move on.

Thu, 03/14/2013 - 10:28 | 3329384 Hohum
Hohum's picture

MaosDog,

Are you sure you want society without Medicare?  Call it welfare but without it, the sons and daughters would be taking care of the elderly and not contributing to "growth."

I think not having "growth" is okay, but do you?

Thu, 03/14/2013 - 11:06 | 3329513 AGuy
AGuy's picture

" the sons and daughters would be taking care of the elderly and not contributing to "growth.""

Irrelevant, since the sons and daughters income is taxes to pay for entitlements, They also must deal with stagflation and other consequences caused by gov't redistribution. You also forget about 20% of the money spend on federal entitlement healthcare is pure fraud since the gov't does little to prevent it, except for burrying healthcare provider under a montain of paper work that increases costs. Rarely does the Federal gov't act or use all of the paper work filed.

The US did fine for the first 150 years without any entitlements, its not going to survive much longer with entitlements. Entitlements is nothing but voter fraud and stealling OPM (other people's Money) to get elected. Sooner or later the politicains run out of OPM or money to borrow and the whole system collapses. Since they've run out of OPM and credit, They have resorted to printing money to keep the game going. But this is the very last option to keep the game going. When it fails there will be blood in the streets, most of the sons or daughters will get caught bloodied.

 

Thu, 03/14/2013 - 08:10 | 3329099 WTFUD
WTFUD's picture

Try this One Asshole Snoop Maos Dog!!
JPM have a $400+ TRILLION Derivatives Book BUT WE are Subsidising Losses.
So fuck off where you belong ypu sack of SHITE!
Regards to you missus for the Blowjob.

Thu, 03/14/2013 - 00:06 | 3328647 Meremortal
Meremortal's picture

I stopped reading almost immediately, the premise was so bad there was little need to go any further.

Good article for ZH as it gives everyone a chance to say one more time how bad all these bad people are.

And we certainly needed to hear that again, hell I had almost forgotten and was ready to hug a bankster. 

 

Wed, 03/13/2013 - 23:25 | 3328559 the grateful un...
the grateful unemployed's picture

i understand how food stamps is indirectly a form of corporate welfare, but you're somehow correlating it at 1.00, which is not close to the truth. this only begins to research the problem, agreed, but don't go Reagan on us, who chided Welfare Queens in Cadillacs, while handing out billions to phony defense contractors to win the Cold War. its a matter of scale, and you can park a lot of food stamps in one phony defense contract, and to some good purpose i might add.

Wed, 03/13/2013 - 22:04 | 3328324 Radical Marijuana
Radical Marijuana's picture

Dear Moas Dog, the only thing that George Washington has done in this article is to grossly understate how bad the real situation is!

The supreme subsidy of "corporate welfare queens" by the government was through the creation of the Federal Reserve Board, and institutionalizing the basic system which enables those entities which qualified as privately owned banks to make fiat money out of nothing, as debts. The government allowing private banks to legally counterfeit the money supply was a subsidy of such astronomical size as to almost impossible to comprehend!

Everything that all poor people have ever received, as well as everything that future entitlements are supposed to deliver, is still practically nothing compared to the ability to make money out of nothing, as debts! The ultimate corporate welfare queen is the Federal Reserve Board. That exists on a scale so massive, that it is metaphorically like the black hole supposed to be at the center of our galaxy.

Wed, 03/13/2013 - 22:12 | 3328346 Maos Dog
Maos Dog's picture

Individual welfare spending, as it currently exists in it's current form, and it's current dollar amounts, would not and could not exist without fractional reserve banking to back it. So, you are arguing agsinst fractional reserve banking, but for massive individual welfare spending, when one cannot exist without the other.

 

 

Wed, 03/13/2013 - 22:59 | 3328440 Radical Marijuana
Radical Marijuana's picture

Yes, I agree with that Moas Dog.

After more than a hundred years of the international banksters being able to destroy the original bimetalic based money that the constitution of the USA presumed would exist, and be regulated by Congress, the bankster corrupted Congress has created the culture which we live in today.

Fractional reserve banking has enabled the present to enslave the future. Therefore, people who are not yet born are supposed to work to pay taxes, to pay for all the wars, including the alleged "war on poverty," that the government has been able to afford to do only because it can use money made out of nothing, as debts, to pay for that.

As I have stated in several previous posts, the assassination of those politicians that the banksters could not bribe was crucial to the real historical processes that have enabled the banksters to take control over the government. That was the cherry on the cake of corruption that has more and more become the government of the USA. In my view, the beginning of the end was when the banksters were able to corrupt Congress to use a sneaky legislative trick to demonetize silver way back in 1874.

That was the beginning of the process of making the words "dollar" and "money" gradually become backwards to what those words originally meant. Gradually, the basic notions of currency vs. money, and everything else related, were perverted and inverted, by the runaway triumphant financial frauds, driven through Congress and the Executive, and agreed to, mostly tacitly, by the Supreme Court.

Another crucial point in that process was back in 1971, when American money finally lost all connection to gold. Hence, the original ideas about money being backed by silver and gold, whose measurements were set by Congress, was more and more transformed to become "money" being made out of nothing, as debts, backed by nothing but the threats of force from the government against the American people, and eventually the whole world too.

The original bimetalic real money was related to the principle of the conservation of matter, which is related to the reality of nature. The current systems of runaway electronic fiat money, backed by atomic bombs, is only distantly related to the laws of nature, because those fiat money frauds are backed up by the force of weapons.

Everything that the USA is doing today, at home and abroad, is based on more than a Century of runaway triumphant force backed frauds, more and more controlling and directing everything that Americans do, and have theoretically agreed upon doing in the future. Therefore, I agree that the commitments to deliver benefits and entitlements in the future were not funded by anything based in reality, other than the ability of frauds to become triumphant because they were enforced. All of that system of legalized lies, backed by legalized violence, almost so totally dominates everything that Americans are doing at home, and abroad, that it is practically impossible to imagine how those problems could be fixed ...

ANYWAY, Moas Dog, I was NOT arguing "for massive individual welfare spending," at least not outside of some murder system, which should ideally be some democratized death controls, that would also be required to make that "welfare spending" become a saner and sustainable social system. Therefore, Moas Dog, I agreed with your reply as basically correct. However, I did not intend my comment to imply that I was against factional reserve banking, but in still favour of massive individual welfare. Since money is backed by murder, one can not change the fractional reserve banking systems without going through some series of political miracles to defeat the international banksters that control the Anglo-American (Zionist) Empire, and, through that, most of the rest of the whole world.

My THEORETICAL "solutions" are what I hinted at in other comments on this article, as well as in many comments that I have made on Zero Hedge for the past few months. Of course, practically speaking, I believe that the problems are so bad that the real future will not be any good solutions, but rather more insane genocidal wars, along with democidal martial law.

Thu, 03/14/2013 - 06:20 | 3328999 Dugald
Dugald's picture

"Therefore, people who are not yet born are supposed to work to pay taxes, to pay for all the wars, including the alleged "war on poverty," that the government has been able to afford to do only because it can use money made out of nothing, as debts, to pay for that."

But this presuposes that the economy is at some time in the future going to turn round.....Ya think?

Thu, 03/14/2013 - 03:18 | 3328868 The Heart
The Heart's picture

Thanks for that RM.

Words that never ringed so close to the plans.

Can it all be changed, or stopped from happening like this?

Time tells all things, and the decision is still to made by the mass mind.

Will ignorance win, or will truth save the ship?

One day at a time...forward!

Wed, 03/13/2013 - 21:35 | 3328244 George Washington
George Washington's picture

Subsidies to the giant banks ALONE = $780 billion per year, per CONSERVATIVE BANK ANALYST (and ZH poster) Christopher Whalen.

Wed, 03/13/2013 - 21:41 | 3328262 Maos Dog
Maos Dog's picture

I will grant you this, I don't believe the number is 100 Billion in corporate subsidies, I do believe it's higher.

However, That article you link claiming the 780 per year includes a LOT of questionable figures included as a subsidy to get the number that high, like including legimate transaction fees charged for OTC transactions, and including mortgages? Really? The writer was grabbing at straws looking for things to get that number to 780 Billion, and it's still less than individual welfare spending.  

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