Why are Taxpayers Funding Private Companies? The Fix is In

By: Joseph C. Phillips

In 1850, the French writer Frederick Bastiat observed, “The law is not a breast that fills itself with milk … Nothing can enter the public treasury for the benefit of one citizen or one class unless other citizens and other classes have been forced to send it in.”

Bastiat’s observation is particularly prescient today as industries from far and wide are lined up at Washington’s door with their hands out. Not one dime of the alms sought by an ever expanding pool of supplicants comes from government. Every penny comes from the wallets of the American taxpayer. The economic “fix” we are engaged in is, in fact, a huge transfer of wealth from John Q Public to those with political connections. And as Bastiat further observed, when the law acts to give to one man at the expense of another it is not a source of justice, but a source of legal plunder.

While the issue of plunder is clear in this instance, the issue of legality remains something of a question.

For the life of me, I can’t put my finger on the language in the Constitution that allows Congress to take money from taxpayers in order to take ownership positions in private corporations. Nor can I pinpoint the section authorizing Congress to transfer its legislative power to the treasury secretary - an unelected official of the executive branch. Oddly enough, I can pinpoint the exact section that says it is illegal: Article 1, section 1.

The bill itself circumvented constitutional rules requiring that taxes originate in the House and not the Senate. In order to circumvent these rules, an old House bill was resurrected, and the new bill was simply “tacked on,” along with about $150 billion of unrelated pork.

And that is perhaps the greatest problem with political solutions: They are, well, political. Violations of law are sold with good intentions, and favors are doled out based on influence. No doubt this is why the number of lobbyists in Washington has more than doubled since the year 2000. These junkies for our dollars are even now meeting with congressmen behind closed doors attempting to convince them that they too are in need of a “fix.” It may also be the reason Nancy Pelosi and her Democratic counterparts in Congress have attempted to redirect a portion of the more than $1.5 trillion in taxpayer money, otherwise known as the bailout to automobile makers.

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