I’m not a big fan of the welfare system. Although there are people in the country that we as a society should help take care of, there is a massive amount of abuse and mismanagement in our welfare system that undermines its legitimacy.
One of the more obvious aspects of welfare are food stamps. We see people in the grocery stores using the little cards, but sometimes they leave in vehicles that cost more than a house.
Today, there are more people using food stamps than ever before. That may be in part due to the economic downturn, but it’s also due to both Democratic and Republican policies since 2002 that have loosened requirements. Today, one in seven Americans are using food stamps, an appalling number for the world’s wealthiest nation. I suspect a large amount of that is due to abuse and outright fraud. It is certainly due in part to efforts by the government to recruit people into the program.
That is, of course, just one part of our massive welfare system. In a myriad of ways, a large number of people are “one the dole” in the U.S. That is certainly a budget issue as a large amount of tax dollars are being consumed to support the welfare system. In an era where the nation is running up a massive amount of debt, that can’t be sustained forever.
But beyond the direct cost of the welfare state is the indirect impact welfare has on our culture and work ethic. The danger to any society — its government and economic system — is for people to stop being self-reliant and to become dependent on others to provide for them. Once addicted to government handouts, people will never want to work again and the culture will implode from the weight of the costs. For an example of how a culture can fall apart from government handouts, just look at the Indian reservations in the U.S. and that broken culture that has happened under decades of federal oversight.
But along with the individual welfare system, our governments at all levels have been growing a corporate welfare system in which large, favored companies are getting tax subsidies and special breaks not available to less politically-connected firms.
That has been true at the national level for decades. Companies that are large enough to hire their own lobbyists are often successful in getting special exemptions inserted into law or into various bureaucratic agency rules. Big firms and their key leaders are often major contributors to Congressional and Presidential campaigns. Don’t think for a moment they’re giving those dollars from some altruistic calling. No, they want special treatment in return for those campaign donations.
But it’s not just Wall Street and federal corporate favoritism that is a problem. In the last few decades, both state and local governments have also expanded their corporate welfare handouts. And much of that has accelerated under Republican control. Although Republicans give lip service to wanting less government and less welfare, the reality is many “conservative” leaders are in the front of the line when it comes to handing out welfare to corporations.
The most obvious area example of this is the much-ballyhooed Caterpillar plant on the line of Clarke and Oconee counties just down the road from Barrow County. When state leaders announced that facility, they made it sound like the plant would be the genesis of massive growth in the region. Barrow leaders were ecstatic at the idea of spinoff plants locating along Hwy. 316 in Barrow County. Republican state and local political leaders joined hands with area chamber of commerce officials to sing “kum-ba-ya” together over the success in luring a large Cat plant to Northeast Georgia.
But it was all a shell game. A few weeks ago, a Georgia Power executive let the cat out of the bag (pun intended) when he told the Putnam County Development Authority that there would not be any spinoff supplier plants locating in the state for the Caterpillar plant. He told the group that state officials had been recruiting suppliers as far away as Japan, but that the Cat plant was too small for suppliers to locate nearby.
Of course, state economic development officials were quick to poo-poo that and said they were still recruiting for suppliers. But the truth is, state political and economic officials vastly overpromised the impact the Cat plant would have on the area.
Why did they do that?
Two reasons. First, state leaders painted a very misleading picture about the impact of the Cat plant in an effort to increase pressure on Oconee and Clarke County leaders. They did that because they wanted Oconee and Clarke leaders to agree to give Caterpillar a massive tax break by waiving local property taxes on the new plant for a very long time. The total cost of that corporate welfare giveaway by Clarke and Oconee was reportedly around $40 million.
State leaders led local officials in both counties to believe that they would make up that giveaway from other spinoff plants that would locate in the area. The only way local county leaders could justify such a handout was to tell their citizens that in the long run, giving welfare to Caterpillar today would bring in more money in the future. Alas, it was all just political theater and neither county will ever see a return on their “investment” in Caterpillar (the term “investment” is how state Republican leaders describe corporate welfare.)
The other reason state leaders exaggerated the impact of Caterpillar is political. In next year’s elections, Republican state legislators and other political leaders want to brag about how many “jobs they created for Georgians.” Polling and focus groups show that job creation is the hot topic for many voters so Republicans like to talk about that at election time.
What they don’t like to talk about is how much their corporate welfare handouts to companies like Caterpillar cost taxpayers in the state. And why should state officials care anyway since most of the corporate welfare they give away isn’t state dollars, but rather local county dollars? They do that by pressuring naïve local government leaders to agree to massive tax breaks, as was the case with Caterpillar. Most of the corporate welfare for that plant didn’t come from the state, but rather Oconee and Clarke taxpayers because their local leaders got pressure from the state.
A similar situation is currently under way in neighboring Jackson County where state officials are reportedly pressuring that county’s leadership to agree to a huge tax break for a prospective industry looking to locate there. So far, Jackson County officials have not agreed to the deal the state wants — and from what I hear, the deal would be terrible for Jackson County’s taxpayers.
All of that is to say this: While we all hate to see abuse in the welfare system for individuals, the bigger problem is the abusive welfare our government leaders are giving away to corporations. There is something obscene about asking local taxpayers to give money to a company like Caterpillar, which is one of the world’s richest corporations. And we all know that when the corporate welfare runs out, Caterpillar will vacate its Oconee/Clarke facility for greener pastures in another community.
It’s time to put a stop to this kind of taxpayer giveaway in Georgia. Citizens should demand a state constitutional amendment that would ban all forms of giveaways for corporations. That would include new stadiums for millionaire owners of professional sports franchises.
If that makes Georgia “less competitive” with other states for such plants, then so be it. The cycle of giving welfare to corporations is sending the wrong message, just as it does with individuals. Once addicted to the handout, corporations will demand more and more, just as individuals have done for decades. It’s folly to think corporations won’t abuse and manipulate the system just as individuals do.
Mike Buffington is co-publisher of the Barrow Journal. He can be reached at email@example.com.