The Case for Ending Subsidies

There are also both strong non-market and market reasons to abolish government subsidies (and other giveaways) to politically favored economic sectors or firms.

Subsidies cost taxpayers a ton of money. Thus, they raise taxes, pile up government debt, and choke off needed investment. To make matters worse, most subsidies flow to those who need the least help—wealthy individuals and giant corporations. Some call it “corporate welfare.”

The market itself is also a victim of government subsidies. They distort prices.  They twist the laws of supply and demand. They prop up less efficient producers. They unfairly saddle the businesses and sectors that do not get subsidies with a competitive disadvantage. In short, subsidies deform the marketplace.

The solution to market-wrecking subsidies is simple. Abolish them.

To create an effective market, it is government’s role to police its own propensity to subvert the market.

At every level of government, policymakers should repeal all subsidies (whether in the form of direct spending, tax breaks, or other devices), and end all other forms of government favoritism, that strip control of the market from the American public and tilt the market in favor of politically annointed forms of consumption and investment.

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