Robbing Peter to Pay Paul

Here's a good write-up from the Cato Institute providing an example of how the government engages in central planning, stealing money from taxpayers and giving it away to companies it has deemed important enough to receive "free" money.  Of course, every handout comes from someone else, namely us in the form of taxes.  The government should not be engaged in choosing winners and losers in the marketplace - if a company has a product or service that is so good, it will stand on its own merits and doesn't need government subsidies.  If it needs subsidies to survive, then perhaps it's not a company that should survive in the first place.  In any event, most of these handouts are simply political favors by politicians trying to gain votes in their districts by showing them the money.  It warrants saying again:  power corrupts, and absolute power corrupts absolutely.

USDA Turning Taxpayer Money Into Wine

Today’s example of how the federal government has become too darn big is the U.S. Department of Agriculture’s Value-Added Marketing Grant program. This (relatively) little slice of corporate welfare will hand out approximately $56 million in taxpayer dollars this year to “producers of agricultural commodities” who can use the money “for planning activities and for working capital for marketing value-added agricultural products.”
A big winner this year appears to be wine producers:

• $33K for the Outer Coastal Plain Vineyards Association in New Jersey.
• $50K for the Ozan Vineyard and Cellar in Alabama.
• $94K for the Wild Wines winery in Oregon, plus $23K for the Southern Oregon Winery Association.
• $50K for the Feather River Vineyards in Nebraska (the USDA kindly kicked in another $50K to Nebraska’s Knotted Wood Distillery to help them market their whiskey).
• Three wineries in New York received $300k combined. The wine grants were complimented quite nicely with a $120K grant given to a New York cheese maker.

The USDA, the politicians who take credit for the awarding of the grants, and the recipients all say that these subsidies are good because the wineries will produce job, economic growth, etc, etc. Maybe they will, maybe they won’t. But as I often stress – to the point that I become blue in the face – federal subsidies are not a free lunch. Every dollar that the federal government spends helping wineries is a dollar that is taxed or borrowed from the private economy. When the federal government subsidizes particular businesses it’s merely transferring economic resources from one entity to another – a.k.a. central planning.

The $56 million Value-Added Marketing Grant program is a pretty small outlay in a $3.8 trillion federal budget. However, it’s not so much the size of the program that’s the problem. Rather, the program symbolizes the problem with allowing the federal government to spend other people’s money on virtually anything that the politicians on Capitol Hill desire. Given the government’s rising debt load, that situation must be remedied before Washington sends the economy off the cliff.

Sigh…somebody pass me a bottle of wine.