The first time I remember giving any kind of damn about the word "subsidy" was in eighth-grade history class, when we had the lesson about farmers during the Great Depression getting cash money from the government NOT to work their land.
You remember that one, right? And your jaw dropped too, right?
Or -- ahem -- am I presuming too much in picturing the 14-year-old you having as much of the nerd in you as I did to care about this apparent policy paradox? Well, you are an Intelligence Squared U.S. fan, after all. And you did click on this blog post. So I'm going to assume that even if the eighth-grade you didn't get all worked up about that particular subsidy program back then, the today version of you will want to be in on the debate we're mounting this Wednesday, when our motion will be:
Now, the subsidy story has evolved a lot since the Great Depression. Farmers still get subsidies, but handouts -- in the form of tax breaks, regulatory exceptions, and straight-out cash -- also go to a whole range of corporate entities, some of whose names you might not believe. Like IBM, which has been given a billion dollars in subsidies over a 20-year period. Or, much bigger, Intel... $3.8 billion over the same period. Of course, you know about the auto companies. But the defense and energy sectors are also big takers ... to the point where, overall, taxpayers are giving away something close to $100 billion a year to private companies.
Outrageous? Well, that may depend on what we're getting for the money. If it's innovation, and job growth, maybe that's a good thing. But if it's corruption (because these companies have to convince politicians to pick THEM, and not some competitor, when the cash is being doled out), and if it’s damaging distortions of the free market, then maybe subsidies represent a kind of rot in the system.
Get ready for more jaw-dropping insights.