Of, By, For… Whom?

In his Gettysburg address, President Lincoln promised that “the government of the people, by the people, for the people, shall not perish from the earth.” It’s certainly a great promise about government, but exactly how true is it today?

Well… there’s certainly one aspect of government that tends to get overlooked, and that’s how much government does for corporations and wealthy individuals,from the Department of Agriculture (USDA) to HEW, the Department of Defense, and the U.S. Postal Service.

The USDA offers more than $20 billion annually in farm subsidies of various sorts. Three quarters of the richest farms receive federal farm subsidies, and one quarter of the 400 richest Americans [as defined by the Forbes 400 List] received federal farm subsidies, including at least four billionaires. Under Federal Crop Insurance programs, the top ten percent of farms receive payments 141% higher per acre than the national average for all farmers, and those in the top ten percent receive 70% of crop insurance payouts. Not only that, the Crop Insurance is issued by 16 insurance companies who also receive as a group on average an annual subsidy of $1.5 billion. And 99.5% of the $12 billion in payments from Trump’s program to cushion the impact of Chinese tariffs on U.S. farm goods went to rich white farmers.

Then there are agricultural import quotas and tariffs. Sugar import quotas and subsidies cost Americans over $4 billion annually, and that money goes largely to three companies through inflated U.S. sugar prices. The same problem exists with rice, which increases U.S. consumer rice prices by roughly 40%.

And while there’s been talk about the high cost of pharmaceuticals, until recently hard numbers have been hard to come by, but the House Ways and Means Committee released a new analysis of drug prices in the U.S. compared to 11 other developed nations, showing that the U.S. could save $49 billion annually on Medicare Part D alone by using average drug prices charged in those countries. That doesn’t even include comparable cost savings for Medicaid.

As I’ve noted elsewhere, the U.S. Postal Service continues to subsidize bulk commercial and advertising mail, as well as undercharge Amazon for package delivery. Several news sources claim that it isn’t so about Amazon, but they don’t understand the fine print. Fixed costs are allocated on a model, and under that model roughly 5% of USPS fixed costs are allocated to package delivery when almost 25% of USPS volume is now in package delivery, and the USPS is running annual deficits of several billion annually, which have to be made up by the federal government.

Then, there’s what government does for the fossil fuel industry. According to a new report from the International Monetary Fund, the U.S. has spent more subsidizing fossil fuels in recent years than it has on defense spending, The IMF found that direct and indirect subsidies for coal, oil and gas in the U.S. reached $649 billion in 2015. Pentagon spending that same year was $599 billion.

And how did that happen? The fossil fuel industry spends some $40 million dollars on campaign contributions to members of Congress every election and another $300 million in lobbying Congress.

And, of course, despite the new tax law, which was supposed to result in a better tax system, an in-depth analysis of Fortune 500 companies’ financial filings finds that at least 60 of the nation’s biggest corporations didn’t pay a dime in federal income taxes in 2018 on a collective $79 billion in profits, according to the Institute on Taxation and Economic Policy.

Now…what was that about government of the people, by the people, and for the people?

8 thoughts on “Of, By, For… Whom?”

  1. robertrehcra says:

    Your forgetting the Supreme Court ruled Corporations are People. 😉


    1. Oh, yes, that “little” Citizens United case. What on earth was I thinking!

  2. Tom says:

    Going along with the recent Guardian’s ‘Wizard of Oz’ view of US Leadership; are not all these factors driving the largest economy of the world and thus benefiting the US as a whole?

    1. I have strong doubts about that, particularly when the benefits end up in the pockets/wallets of the top 1/10 of one percent, because studies have shown the economy benefits more when the middle and lower classes have more money to spend.

      1. Tom says:

        No trickle down crumbs from the top 1%?

  3. R. Hamilton says:

    How does the portion received by the richest farmers/farm corporations compare with the portion produced by them? If those are comparable (production at least proportionate to subsidies), what’s the problem? Should every subsidy be an opportunity for redistribution?

    Except for high-end products (exotic, organic, those requiring exceptional attention and handling), it seems to me that sadly, the days of the family farmer are mostly over – although some that generally avoid subsidies still seem to be surviving, if burdened with added regulations.

    On the other hand, if redistribution is not the objective, should subsidies exist at all?

    1. Exactly! Why should taxpayers be subsidizing the richest farmers? Or the wealthy pharmaceutical companies? Or the largest U.S. sugar producers?

      1. R. Hamilton says:

        …or, just maybe aside from measures of modest expense dependent mainly on enabling the efforts of the recipients, subsidizing anyone at all? (with the usual exception of those injured in the line of duty in some form of government service, which should be aided by the level of government they served in)

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