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Rules of Thumb For Making Laws – Rule #3 Just say “No” to subsidies

By Pat Pending

These days, it seems that everyone in the world has his hand out asking for government subsidies.  The steel industry says it will go under if it doesn’t get a bailout from Uncle Sam.  Farmers say the family farms will die out without government help.  People whose relatives died in the Oklahoma City bombing are upset that they aren’t getting the payoffs that the families of the World Trade Center attack victims are getting.  Even professional sports franchises believe that local taxpayers should subsidize them “for the good of the community”.  Local taxpayers also subsidize restaurants, hotels, pizza parlors, gambling casinos, and more!  So how can a taxpayer or a legislator know whom to subsidize for the good of the community?  The answer is very simple – nobody!  Just say “No” to subsidies!

Tax money is not manna from heaven.  It is money taken by force from the working people who have earned it.  If it is not absolutely required for the most essential functions of government designed to defend life, liberty, and property from aggression, such as courts and police protection, then it should be returned to the people or not taken from them in the first place.  Under no circumstances should tax money be used to allow the government to pick the winners and losers or to reward friends and punish enemies.  Any taxation above the bare minimum is an opportunity for corruption and unequal treatment.

But what will happen to the poor steel workers, farmers, disaster victims, restaurant workers, and others if there are no subsidies?  Actually, most of them would be better off.  Without subsidies and protection, steel companies would have to invest in new equipment, making their businesses more competitive and their employees’ jobs more secure.  Rather than being locked into producing products that include a government subsidy, farmers would be more flexible and freer to respond to the market, thereby making them more competitive.  The restaurant workers who are not employed at a subsidized restaurant likely will be employed at a non-subsidized restaurant.  The professional basketball players who are not subsidized with taxpayer-funded arenas will be paid on the basis of the income they generate for the owners.

Even people who lose their jobs in non-competitive businesses will likely be better off after finding jobs in more competitive businesses.  Change can be very difficult and stressful, but life is full of changes and challenges, and it is much better for people to make career changes in order to remain competitive than to impoverish everyone and plunder hard-working people in order to artificially prop up obsolete or uncompetitive businesses.  In the end, change will come anyway, and it is far better for the change to be gradual and natural than abrupt and widespread as is usually the case when an artificial support finally gives way. 

Just imagine how much better off we would be if we could get government out of the plunder business!  We would have more money in our pockets to use as we think best – whether that is to buy a dinner out (helping the restaurant business), to repair a leaking roof (helping the construction industry) or to pay a poor child’s tuition (helping the child and the education business).  The things we buy would be less expensive -- since there would be no more subsidies or protection for peanuts, sugar, steel, and other products.  Such a step would also go a long way toward wiping out corruption in government.  Not to mention that it would free up many lobbyists to engage in more productive endeavors and would return us much closer to being free people instead of the tax serfs we are today.

So the question should not be whether to subsidize an arena or a convention center.  It should not be whether to subsidize a farmer or a steel worker or the airline industry or a disaster victim.  The question should be, “Is this a subsidy?”.  If it is, then the decision is simple – no more subsidies. 

Rule #1 - Don't punish the victim.

Rule #2 The Road To Hell Is Paved With Good Intentions -- So Consider Unintended Consequences, Measure Results, and Include Sunset Provisions

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