Failed Crony Subsidies: From Washington (George) to Obama (Barack)
April 15, 2014
For more than 200 years, politicians have tried to spark economic growth through government subsidies. Almost all of them have been expensive and demoralizing disasters. The Heritage Foundation recently estimated that most major corporations have taken federal aid, and that this spending has cost taxpayers $3,000 per second of every day since the year 2000. One of us (Burton Folsom) has just finished the first historical study of government subsidies. The book, entitled Uncle Sam Can't Count , is published by HarperCollins and is available April 15. It starts with George Washington's failed aid to a fur trading company and analyzes later subsidies for steamships, railroads, the first airplane, ethanol, electric cars, and more. Some have been catastrophes; all have done more harm than good. First, these subsidies have been expensive, and today they are moving the U.S. toward bankruptcy. Some criticize welfare for our financial mess, but federal aid for relief has been law for only 82 years; public sector unions, another source of debt, have only been powerful for 40 years. Corporate subsidies, however, have been with us for over 200 years, and often their presence has justified damaging federal spending in other areas as well.