The idea of the government to grant cash subsidies to private businesses or individuals will probably always be controversial in American society where the principle of free-market capitalism is held up as the highest ideal.
Yet, even those who are the staunchest critics of government hand-outs are often those who most eagerly accept free government cash. One example of this is found in the farming sector.
As well all know, subsidies to farmers in the form of government price support for dairy products, the grain markets, meat prices is one of the largest items of the U.S. Federal budget. Yet farmers pride themselves on their fierce independence and mistrust of government interference.
Furthermore, a large survey recently showed that about 70% of farmers and ranchers vote Republican while just 19% vote for Democrats. About 12% are registered as independents. This seems odd considering that the Republican party generally campaigns on reducing government spending and shrinking government subsidies so that everyone can pay lower taxes.
Farmers counter by saying their industry is the exception to free-market values because the price for what they produce would collapse without being propped up by government subsidy programs. It is something that is out of their control, farmers contend.
The point is that government subsidies play an important role across an array of industries. For example, the fossil fuel industry has historically enjoyed enormous subsidies in the form of both sizeable government tax breaks to direct support of taxpayer programs that pay for things like research and development in the energy sector.
Another example is the pharmaceutical industry. It reaps enormous benefits from R&D on drug development paid for by government agencies, such as the National Health Service (NHS). It spends billions of taxpayer dollars on developing new drugs which are largely given over to drug companies to sell and make a profit from.
The bottom line shown by these examples, however, is that government subsidies are an effective way to ensure that our nation produces enough of those commodities that are vital to our daily existence. Things like food, medicines, and fuel are fundamental to the needs of the American people.
It is likely that all these sectors would collapse if they were made to rely on pure free-market capitalism to thrive. It is government subsidies – which some decry as socialism – that ensure we all have the most basic things we need every day.