Earlier this year Open the Books, a non-partisan watchdog group advocating transparency in public spending, issued a genuinely shocking report that added up all federal grants, loans, direct payments, and insurance subsidies going to private companies.
Among its findings: corporate-welfare payments from the federal government to the Fortune 100 companies, from 2000 to 2012, amounted to more than $1.2 trillion.
The bulk of this was in the form of contracts between government agencies and private firms, with the largest going to the military-industrial complex. While these provide some services to taxpayers, such spending is difficult to control because the huge sums also fund a massive lobbying industry busily working for more such spending.
But contracts aside, staggering amounts of money were just given away as outright subsidies — taxpayer-funded handouts to the biggest businesses in America.
Writing in National Review Online, economist Stephen Moore summarizes: “$21.3 billion… was doled out in the form of outright income-transfer subsidies to corporate America. On average, each Fortune 100 company received about $200 million in such [taxpayer-funded] handouts.
“So who are the major corporate-welfare queens? The biggest grant recipients were General Electric ($380 million), followed by General Motors ($370 million), Boeing ($264 million), Archer Daniels Midland ($174 million), and United Technologies ($160 million).
“About $8.5 billion of this largesse came in the form of taxpayer-subsidized loans. The big winners here were Chevron, Exxon Mobil, Ford Motor Company, and other multibillion-dollar corporations whose franchisees received Small Business Administration loans.
“Archer Daniels Midland got just under $1 billion for USDA farm-program loans, and this doesn’t include ethanol subsidies. Another $10 billion was doled out through federal insurance…”
And the problem goes beyond even these staggering sums. Says Moore:
“That $1.2 trillion number does not include the hundreds of billions of dollars in housing, bank, and auto-company bailouts in 2008 and 2009, because those payments are kept mostly invisible in the federal-agency books. It also doesn’t include the asset purchases of the Federal Reserve, indirect subsidies such as the ethanol mandate that enriches large agribusinesses like Archer Daniels Midland…
“Amazingly, all but one of the Fortune 100 stood in the federal soup line to take at least some form of corporate-welfare benefit.”
Sums up Moore: “Imagine for a moment that you are sitting on your couch watching TV and there is a knock on the door. There in a corporate suit is an employee of General Dynamics with a tin cup and he asks if you would contribute a dollar for a research project. You would slam the door in his face. But somehow when the government collects a dollar from each of us and gives the money to General Dynamics, this is considered in Washington a wise ‘investment.’”