Biden’s $2 Trillion Infrastructure Plan Is Loaded With Corporate Welfare

President Biden has just unveiled a new $2.3 trillion “infrastructure” plan, but a shockingly large portion of this bill is actually unrelated to infrastructure.

The plan includes massive subsidies for corporations as well as state and local governments, and comes right after the administration’s proposed increase in the corporate tax rate, which would raise the rate from 21 percent to 28 percent.

There’s $300 billion for manufacturing, $100 billion for electric utilities, $100 billion for broadband, $174 billion for electric vehicles, and a whole lot more. A significant portion of this spending is directed at subsidizing big corporations.

What the plan overlooks is that corporations are already investing heavily in the industries they aim to subsidize. For example, companies like Tesla and Volkswagen have invested billions into developing electric automobiles and charging infrastructure. Biden’s plan would aim to influence consumer spending decisions through the creation of further incentives for such vehicles. In other words, these companies would see their profits boosted as a result of artificially increased demand. The same goes for Verizon and T-Mobile that have invested in broadband, and Mitsubishi and Siemens that have invested in wind energy.

Subsidizing multi-billion dollar corporations and pumping up their profits is corporate welfare, not an infrastructure plan. The private sector built hundreds of thousands of gas stations across the country, and if there is demand for it, they will do the same with charging stations for EVs. A federal takeover of business investment decisions in this manner will inevitably have repercussions.

The Biden administration has included $100 billion to “decarbonize” the US electric grid, essentially eliminating coal and natural gas, alongside $213 billion for affordable housing and $400 billion to bolster home health-care. Despite President Biden’s push for bipartisanship, partisan political spending runs through his plan.

This plan comes on the heels of Biden's proposed corporate tax hikes.

The current administration is betting that damage caused by jacking up taxes will be outweighed by the massive amount of federal spending in this proposal. As the president of the Tax Foundation, Scott A. Hodge put it, “Based on CBO’s (Congressional Budget Office) assessment of the economic and budgetary effects of federal investment, there is no reason to believe that the economy will be better off with such a trade.”

The CBO estimates that $2 trillion in federal spending will yield about $1.3 trillion in actual investment. Since government investment only results in half the returns of private investment, we would be much better off if the $2 trillion in corporate tax increases that Biden needs to fund this plan were left in the hands of the private sector.

This plan would be a massive circular flow of revenue with increased corporate taxes funding subsidies for large companies, ultimately decreasing investment and long term capital formation. As federal spending increases to unprecedented levels, state and local governments become nothing more than the administrators of a giant national government.

Bureaucracies are notoriously and inherently inefficient, the economist Ludwig von Mises has pointed out.

“It is a widespread illusion that the effi­ciency of government bureaus could be improved by management engineers and their methods of scientific management. . . . What they call deficiencies and faults of the management of administrative agencies are necessary properties. A bureau is not a profit-seeking enterprise; it cannot make use of any economic calculation. . . . It is out of the question to improve its management by reshaping it ac­cording to the pattern of private business."

Expanding bureaucracy will only exacerbate these effects. The expenses and delays involved in collecting trillions of dollars in additional corporate taxes, running them through Washington and eventually using them to finance countless programs only serve as further discouragement against pursuing such a plan.

Overall, a thorough analysis of this proposal reveals that it would ultimately do more harm than good. In addition to the high levels of political spending and unnecessary intervention in business investment decisions, this plan would be a burden on the economy, reducing investment, growth, and prosperity over the long run.

Aadi Golchha

Aadi Golchha is the author of "The Socialist Trap: How the Leftist Utopia Will Destroy America" and an independent political analyst.

This article was originally published on FEE.org. Read the original article.

Biden’s $2 Trillion Infrastructure Plan Is Loaded With Corporate Welfare

Reality Check: Is Supporting Corporate Welfare A Conservative Position?

Reality Check: Is Supporting Corporate Welfare A Conservative Position?


I asked Huckabee how it could be considered the conservative position to support farmers who have been building out the system of ethanol subsidies when so many would say it’s nothing more than corporate welfare and federal mandates with the government forcing subsidy use.

Here’s his response:

“Well, here’s the problem: the government is the one that did the mandate,” Huckabee said. “The government is the one that basically said to the industry and said to agriculture, ‘look we need to have biofuels, we need to start putting these in place.’ So the government created the mandate.”

Is that true?

Well, not entirely.

Corn ethanol receives the trifecta of government support. That is, tax breaks and government subsidies for farmers and ethanol infrastructure; an import tariff on any ethanol producers overseas; and a federal protection mandate called the Renewable Fuel Standard (RFS).

That RFS mandate by the federal government requires 15 billion gallons of gasoline be mixed with ethanol each year, starting in 2015 and continuing through 2022.

So when Huckabee says that government forced these mandates upon the corn industry, it’s not entirely true.

In 2012, the corn ethanol industry spent $22.3 million—or more than $61,000 per day—lobbying before the U.S. Congress and federal agencies. “The private sector went out and invested billions of dollars to carry out that mandate,” Huckabee said. “Now if the government comes back and changes the rules, you have just busted billion dollars in private sector investment.”

And that’s true.

The private sector did invest billions of dollars in private capital into an industry that was built upon certain rules, subsidies and mandates. But the problem with Huckabee’s argument is that we should keep a system in place, even if it is unfair and uses law to force consumers to buy a product, because private industry invested in it.

Florida governor’s budget boosts cash for corporate welfare

Among the largest individual increases, however, is a $256 million boost to the Department of Economic Opportunity for tax incentives and breaks to industries that meet goals for creating jobs.

via megalextoria.com