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Ron Paul Dear Colleague Against Corporate Welfare

Ron Paul “Dear Colleague” Against Corporate Welfare
(J. Bradley Jansen was the legislative staffer for Dr. Paul on these issues at the time)

Stop Corporate Welfare!
Vote for the Paul amendment to Foreign Operations Appropriations to stop new taxpayer obligations from the
Ex-Im Bank, OPIC and Trade Development Agency

July 22, 1999

Dear Colleague,

Today’s Journal of Commerce op-ed, “Corporate welfare: bad business all around,” explains well the problems with these export promotion boondoggles.

Government support for corporations:
∙undermines sound business decision-making,
∙are counterproductive and often lead to unproductive and unsustainable investments,
∙can increase regulatory burdens, and
∙can contradict business public policy campaigns.

“There is little theoretical support or empirical evidence that supports claims that subsidizing exports or overseas investment offers a positive net gain in jobs to the U.S. economy. While overseas direct investment generally does have a positive impact on the economy, this conclusion may not hold if those investments are made as a result of a subsidy,” according to the Congressional Research Service.

“Subsidies for exports shift resources within the domestic economy towards the subsidized export sector at the expense of other sectors of the economy…national income as a whole would be reduced since all sectors of the economy would be operating sub-optimally: income gains in the subsidized sector would be achieved at the expense of all other sectors of the economy,” CRS added.

Government-subsidized export promotion schemes redirect capital from its most efficient uses. This misallocation of credit reduces economic growth and hinders employment growth. The resultant change of a misdirection of investment capital away form the productive sectors of an economy through government subsidies to the less productive ones is NET NEGATIVE in terms of efficiency and total job creation. The question is not only one of jobs created but of net jobs created, seen or unseen. Cut corporate welfare, vote for the Paul amendment!

Respectfully,

Ron Paul