Double Standards #2 – Welfare

Here is another example of a common double standard widely supported by economic conservatives.

Keep in mind that we all have double standards. It’s part of the friction of living in groups. And we’re all pretty righteous about our own double standards. Things get petty and can be bothersome, but we usually, eventually, work things out, because we need to get through the day.

In the United States, at both the state and national levels, over the last few decades a particular double standard has become more and more apparent: Business welfare is good. Working class welfare is bad

Here is the conservative line about “Welfare”, as stated by any number of nationally prominent Republicans:

The government needs to cut expenditures, particularly “entitlement programs” such as Medicare* and Social Security**, but pretty much all social welfare programs. If the government fails to do so the economy will collapse, as the government does not have the revenue to pay for these programs. In addition, giving people something for doing nothing simply encourages a feeling of entitlement and leads to increased crime.

OK. Let’s accept these arguments, shall we?

But then, I don’t see any reason why they should be limited to “entitlement programs”. If the arguments are true, shouldn’t they apply to businesses too?

How about if these business executives follow their own advice?

Businesses should not receive special support from government. Any benefit a business receives from government should be paid for***: businesses should pay a tax or a fee for those services the government provides, in direct proportion that the business benefits from that service. Any other cost/use relationship would be unfair, as it would either put an unfair burden on the business (when the fees/taxes paid exceed the benefit) or give preferential unearned benefits (“welfare”) to the business.

Examples of services the government provides businesses: a legal system that is essential to the creation of contracts. A court system that is essential to enforcement of contracts. A free press which maintains a vibrant communications system for transacting business, particularly advertising and on-line services. A public road system that makes it possible for people to get to work, to shop for products and services, and for the delivery of products. A public school system that prepares potential employees for work. A police force that protects business property and people from harm

Shouldn’t business pay their fair share for these services the government provides us all?

And why should the rest of us pay for bailouts for businesses “too large to fail”? A group of investors selects a management team that runs the business into the ground, and then expects a government bailout to cover their bad debts. Can you think of a better example of “welfare” or of a group with a sense of “entitlement”?

Perhaps the conservatives are right: if businesses paid for the benefits of government, instead of letting the working class foot the vast majority of the bill, the economy would be more balanced.

After all, giving businesses something for doing nothing simply encourages a feeling of entitlement and leads to increased crime.

What do you think?

Notes:

*Medicare is paid for primarily by a tax on income. As with any insurance, benefits are based on coverage and need. Medicare is not health care–it is health insurance, which is not the same thing.

**Social Security is completely paid for by a tax on income. As with any pension plan, the “benefit” bears a direct relationship to the amount paid in (Social Security taxes) by the recipient, and how long ago the tax was paid.

***It is well documented that many businesses, particularly very large corporations, pay little or no income taxes, even in years where they make record profits.

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