Think by Numbers Podcast

15% of likely U.S. voters think the federal government should continue to provide funding for foreign countries to buy military weapons from U.S. companies. Seventy percent (70%) oppose this funding to promote U.S. arms sales. Fifteen percent (15%) are undecided about it.  (To see survey question wording, click here.)

Voters are more closely divided on the topic of farm subsidies. The U.S. government typically provides more than $20 billion a year in crop and farm subsidies, and 37% of voters feel those subsidies should continue. But a plurality (46%) thinks those subsidies should be ended, while 17% more are not sure.

Similarly, the federal government’s Export-Import bank provides billions of dollars in loans and loan guarantees to companies like Boeing and General Electric. The stated purpose is to sustain American jobs by financing U.S. exports.  But just 29% of voters believe the government should continue to provide loans and loan guarantees to help finance export sales for large corporations. Again, a plurality of 46% opposes loans and loan guarantees for this purpose. Twenty-five percent (25%) are undecided.

  – Rasmussen Reports

The Iraq War cost $3 trillion. That's enough to end world hunger for 100 years. We chose differently. Here are the numbers.

A trillion is a very big number. It's bigger than a billion. I think it's made by adding lots of smaller numbers together until you get tired of counting. We got tired at three trillion, which is how much we spent making Iraq worse.

100,000+ Iraqi civilians died. That's 35 September 11th attacks. We respond to one by starting a war that causes 35 more. The math is third-grade level, so the logic is mysterious.

4 million Iraqis lost their homes. That's the entire population of Maine, Idaho, and New Hampshire combined. They cannot all crash on your couch.

Liberation means setting someone free. We liberated 4 million Iraqis from their homes. Now they're free to live somewhere else, like a refugee camp or a foreign country that doesn't want them. Freedom is very complicated.

4,444 U.S. troops died. 98% male, 91% non-officers, 54% under age 25. We sent children to die. We call this "supporting the troops."

32,051 U.S. troops wounded. 20% are serious brain or spinal injuries. These don't count psychological injuries, because apparently those don't matter.

"Supporting the troops" means sending them to Iraq and then they get shot. I thought "support" meant helping someone, like holding them up so they don't fall down. But in military terms, it means the opposite. We supported them so hard that 4,444 of them died.

$900 billion spent through November 2010. That's approved spending. The real number is higher.

$9 billion just disappeared. Also 190,000 guns, including 110,000 AK-47 rifles. We shipped them to contractors and nobody knows where they went. This is called "losing track" rather than "theft" because the people who lost track also approve the budgets.

I think $9 billion disappeared because money is very small and easy to lose. Like when you lose your keys, except instead of keys it's nine billion dollars. And instead of looking for it, we just printed more money and kept going.

$1 billion in equipment missing. Tractor trailers, tank recovery vehicles, machine guns, rocket-propelled grenades. All gone. Probably fine.

$10 billion mismanaged and wasted. This is the official number from Congressional hearings, which means the real number is larger.

"Mismanaged" means you managed something badly. The opposite would be "well-managed," which is when you don't lose a billion dollars of equipment. We chose the first option because the second option requires paying attention to where things are.

$1.4 billion in Halliburton overcharges deemed "unreasonable and unsupported" by the Pentagon. They paid anyway.

$20 billion paid to KBR (formerly part of Halliburton) for food, fuel, and housing. Pentagon auditors questioned $3.2 billion of this. We paid that too.

$5,000 spent per second in 2008. That's the sound of money burning.

$390,000 to deploy one soldier for one year. We could have paid them $390,000 to stay home and saved money on ammunition.

Graph Source: http://awesome.good.is/transparency/013/transparency013trilliondollarwar.html

47,000 U.S. troops remained after all other nations withdrew. Apparently we were the only ones who didn't get the memo.

316 non-U.S. troops died. 179 from the UK. They figured it out faster than we did.

30% of returning troops develop serious mental health problems within 3-4 months. We don't count these as casualties because that would make the numbers look bad.

75 military helicopters downed. At least 36 by enemy fire. Helicopters cost money. People don't, apparently.

Graph Source: http://www.wallstats.com/blog/us-troop-stength-in-iraq-and-other-data/

180,000 private contractors in August 2007. That's more contractors than troops. We privatized war. The invisible hand of the market now holds a gun.

146 journalists killed. 97 murdered, 49 in acts of war, 14 by U.S. forces. Apparently some people didn't want this documented.

9,889 Iraqi police and soldiers killed as of January 2011. We trained them to fight and then they died. This is called "building capacity."

100,000+ Iraqi civilians killed according to secret U.S. government documents released by Wikileaks. The UN says this is "significantly under-reported" and estimates reach 600,000. We're not sure because we didn't count. You don't count things you don't care about.

Graph Source: http://musingsoniraq.blogspot.nl/2011/01/2010-ends-with-slight-drop-in-iraqi.html

55,000 insurgents killed. Roughly estimated, because we're better at killing than counting.

572 non-Iraqi contractors and civilian workers killed. People came from other countries to help and died.

306 non-Iraqis kidnapped. 57 killed, 147 released, 4 escaped, 6 rescued, 89 status unknown. We're not great at keeping track.

Daily insurgent attacks:

Insurgency strength:

We invaded to fight terrorists. We created more terrorists. The math is simple. The logic is absent.

An insurgent is someone who fights against an occupying force. We became the occupying force, so people started fighting against us. Then we called them insurgents. Before we invaded, they were just people living in Iraq. After we invaded, they became insurgents. It's like magic, except instead of pulling a rabbit out of a hat, we pulled 70,000 fighters out of a country we destroyed.

2.25 million Iraqis displaced inside their own country as of May 2007.

2.1-2.25 million Iraqi refugees fled to Syria and Jordan. We freed them from their homes.

27-60% unemployment where curfew isn't in effect. Those are Depression-era numbers. We brought them democracy and unemployment.

50% inflation in 2006. Food costs double. Wages don't. This is called "economic freedom."

28% of Iraqi children chronically malnourished in June 2007. But 72% aren't, so clearly things are going well.

40% of professionals left Iraq since 2003. The smart ones fled.

34,000 physicians before the invasion.

We killed the doctors. Then wondered why healthcare got worse.

Doctors are people who make sick people better. When you kill the doctors, there's nobody left to make sick people better. So sick people stay sick, and then they die. I'm not sure why we killed the doctors. Maybe we thought Iraqis didn't need healthcare anymore because they were liberated.

Baghdad electricity before the war: 16-24 hours per day

We made electricity scarce. This is called "spreading freedom."

Electricity is what makes lights work. Before we liberated Iraq, lights worked for 16-24 hours per day. After liberation, lights worked for 5.6 hours per day. So freedom makes lights work less. I always thought freedom meant having more choices, but apparently it means having less electricity.

37% of homes connected to sewer systems. Most people live with raw sewage. We spent $3 trillion on this.

70% of Iraqis lack adequate water. Water doesn't work but at least we brought democracy, which also doesn't work without water.

22% of water treatment plants rehabilitated. We broke the rest. "Rehabilitation" implies they're getting better. They're not.

Graph Source: http://www.foreignpolicy.com/story/cms.php?story_id=4228

82% strongly oppose coalition troops. We liberated them. They want us to leave. The disconnect is notable.

Less than 1% believe coalition forces improved security. We spent $900 billion. Less than 1% think it helped. The return on investment is poor.

67% feel less secure because of occupation. We made them less safe. While spending money to make them safer. This is either incompetence or lying, and both are bad.

72% have no confidence in multinational forces. Three-quarters of the people we're "helping" don't trust us. This is called "winning hearts and minds."

Poll taken in Iraq in August 2005 by the British Ministry of Defense (Source: Brookings Institute)

Graph Source: http://www.good.is

The war is over. The lessons aren't learned. Here's how to prevent the next one:

Data presented as of March 31, 2011, except as indicated.

http://media.blubrry.com/thinkbynumbers/thinkbynumbers.org/wp-content/uploads/2016/10/tbn009_fun_facts_about_iraq.mp3

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Graph Source: http://musingsoniraq.blogspot.nl/2011/01/2010-ends-with-slight-drop-in-iraqi.html

Data is presented as of March 31, 2011, except as indicated.

The Obama administration allocated $19.2 billion to help doctors buy iPads. More specifically, they gave up to $44,000 per doctor to switch to electronic medical records using apps like Drchrono.

The funding came through the Health Information Technology for Economic and Clinical Health Act (HITECH Act), which President Obama signed on February 17, 2009 as part of the American Recovery and Reinvestment Act. An economic stimulus bill that stimulated the top 0.2% of income earners in the world.

Here's how this works: Take taxes from administrative staff making $25 per hour. Give that money to doctors in the top 0.2% of global income earners. Watch those doctors use the technology to fire the administrative staff who paid for it. It's wealth redistribution, just in the direction that typically makes economists check their notes twice.

Electronic health records are obviously good. Efficiency is good. But it's notable that we funded this by taking money from the people who would lose their jobs from the efficiency gain, and giving it to people who could have afforded an iPad by working for 3.7 hours.

The average doctor salary in the US is approximately $200,000. An iPad costs about $500. The government gave them $44,000. The math requires third-grade arithmetic. The policy requires explaining.

http://media.blubrry.com/thinkbynumbers/thinkbynumbers.org/wp-content/uploads/2016/10/tbn004_ipads-for-doctors.mp3

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More upward wealth redistribution from the good folks at the Obama administration!

Now starving doctors will finally be able to afford an iPad thanks to your generous tax contribution! With the increased efficiency of electronic record keeping they’ll probably even be able to fire some of their fat cat administrative staff!  (It’s ironic that taxes were being taken out of the paychecks of these ~$25 per hour employees in order to provide subsidies for doctors who are 0.2% highest income earners in the world. This is compounded by the fact that the changeover will enable the doctors to save even more money by laying off administrative staff after the new technology renders them redundant.)

The Obama administration strongly desires that all medical records be electronic. There’s an app called Drchrono for the iPad which can make that transition happen. Logically, the government will give up to $44,000 to any doctor willing to use it.

The funding will come through the Health Information Technology for Economic and Clinical Health Act (HITECH Act) in which the government allocated $19.2 billion dollars to help move U.S. doctors to electronic medical record systems.  President Obama signed HITECH into law on February 17, 2009 as part of the American Recovery and Reinvestment Act of 2009 (ARRA), an economic stimulus bill.

Thank goodness we were able to raise the debt ceiling! Now the government can afford to help these destitute medical professionals climb from the impoverished depths of the 0.2% highest income earners in the world to the 0.1% highest earners.

I don’t mean to imply that I oppose the adoption of electronic health records. I wholeheartedly support this goal. However, it’s important that middle class taxpayers know that they are subsidizing the top 0.2% richest Americans.

Time Magazine, Vol. 152 No. 19

Before we look at the details, a heartfelt plea from the Save the CEO's Charitable Trust:

There's so much suffering in the world. It can all get pretty overwhelming sometimes. Consider, for a moment the sorrow in the eyes of a CEO who's just found out that his end-of-year bonus is only going to be a paltry $2.3 million.

Before you judge CEOs, try living on $2.3 million yourself. You can't even buy a small yacht with that. You'd have to settle for a medium-sized yacht, which is basically poverty.

“It felt like a slap in the face. Imagine what it would feel like just before Christmas to find out that you’re going to be forced to scrape by on your standard $8.4 million compensation package alone. Imagine what is was like to have to look into my daughter’s face and tell her that I couldn’t afford to both buy her a dollar sign shaped island and hire someone to chew her food from now on, too. To put her in that situation of having to choose… She’s only a child for God’s sake.”

It doesn’t have to be this way. Thanks to federal subsidies from taxpayers like you, CEO’s like G. Allen Andreas of Archer Daniels Midland was able to take home almost $14 million in executive compensation last year. But he’s one of the lucky ones. There are still corporations out there that actually have to provide goods and services to their consumers in order to survive. They need your help.

For just $93 billion a year the federal government is able to provide a better life for these CEO’s and their families. That’s less than the cost of 240 million cups of coffee a day. Won’t you help a needy corporation today?

n. Financial aid, such as a subsidy, provided by a government to specific individuals.

When one thinks about government welfare, the first thing that comes to mind is the proverbial welfare queen sitting atop her majestic throne of government cheese issuing a royal decree to her clamoring throngs of illegitimate babies that they may shut the hell up while she tries to watch Judge Judy. However, many politically well-connected corporations are also parasitically draining their share of fiscal blood from your paycheck before you ever see it. It's called corporate welfare. The intent here is to figure out which presents the greater burden to our federal budget, corporate or social welfare programs.

Before you criticize welfare queens, try sitting on a throne of government cheese yourself. It's very uncomfortable. The cheese is not structurally sound. This is why corporations prefer cash subsidies, which are much easier to sit on and also don't attract mice.

There are, of course, positive and negative aspects to this spending.The primary negative aspect is that you have to increase taxes to pay for it. Taxing individuals lowers their standard of living.  It reduces people’s ability to afford necessities like medical care, education, and low mileage off-road vehicles.The common usage definition of social welfare includes welfare checks and food stamps. Welfare checks are supplied through a federal program called Temporary Aid for Needy Families. Combined federal and state TANF spending was about $26 billion in 2006. In 2009, the federal government will spend about $25 billion on rental aid for low-income households and about $8 billion on public housing projects. For some perspective, that’s about 3 percent of the total federal budget.

Note: I do not consider Medicaid to be included in the term “welfare” as it is used in common parlance.  Typically, if one states that someone is “on welfare”, they mean that the person is receiving direct financial aid from the government.  If we included Medicaid in our definition of social welfare, we would also have to consider any service that the government pays for to be “welfare”.  For instance, public roadways to individuals’ homes would also be considered “welfare” under that expansive definition.

Another negative aspect relates to the fact that social welfare programs reduce the incentive for recipients to become productive members of society. However, in 1996, Congress passed a bill enacting limited welfare reform, replacing the Aid to Families with Dependent Children (AFDC) program with the new Temporary Aid to Needy Families (TANF) program. Now, with the recent changes in healthcare including Obamacare tax implications, some states are enacting strict criteria that a family must meet to be eligible for TANF. One key aspect of this reform required recipients to engage in job searches, on the job training, community service work, or other constructive behaviors as a condition for receiving aid. The bill was signed by a man named Bill Clinton, who is much better known for an act of fellatio which, of course, had far greater societal implications. Regardless, the success of this reform was pretty dramatic. Caseloads were cut nearly in half. Once individuals were required to work or undertake constructive activities as a condition of receiving aid they left welfare rapidly. Another surprising result was a drop in the child poverty rate. Employment of single mothers increased substantially and the child poverty rate fell sharply from 20.8 percent in 1995 to 16.3 percent in 2000.

Graph Source: http://census.gov/hhes/www/poverty.html

Now, let’s consider the other kind of welfare.

Definition: corporate welfare

n. Financial aid, such as a subsidy, provided by a government to corporations or other businesses.

The Cato Institute estimated that, in 2002, $93 billion were devoted to corporate welfare. This is about 5 percent of the federal budget.

Infographic Source: http://awesome.good.is/transparency/web/1012/subsidize-this/flat.html

Whenever corporate welfare is presented to voters, it always sounds like a pretty reasonable, well-intended idea. Politicians say that they’re stimulating the economy or helping struggling industries or creating jobs or funding important research. But when you steal money from the paychecks of working people, you hurt the economy by reducing their ability to buy the things they want or need. This decrease in demand damages other industries and puts people out of work.

Most of the pigs at the government trough are among the biggest companies in America, including:

However, the largest fraction of corporate welfare spending, about 40%, went through the Department of Agriculture, most of it in the form of farm subsidies. (Edwards, Corporate Welfare, 2003) Well, that sounds OK. Someone’s got to help struggling family farms stay afloat, right? But in reality, farm subsidies actually tilt the cotton field in favor of the largest industrial farming operations. When it comes to deciding how to dole out the money, the agricultural subsidy system utilizes a process that is essentially the opposite of that used in the social welfare system’s welfare system. In the corporate welfare system, the more money and assets you have, the more government assistance you get. Conversely, social welfare programs are set up so that the more money and assets you have, the less government assistance you get. The result is that the absolute largest 7% of corporate farming operations receive 45% of all subsidies. (Edwards, Downsizing the Federal Government, 2004) So instead of protecting family farms, these subsidies actually enhance the ability of large industrial operations to shut them out of the market.

Graph Source: http://ers.usda.gov/data

The same is true in all other industries, too. The government gives tons of favors to the largest corporations, increasing the significant advantage they already have over smaller competing businesses. If, in the court of public opinion, Wal-Mart has been tried and convicted for the murder of main street, mom-and-pop America, then the government could easily be found guilty as a willing accomplice. Wal-Mart receives hundreds of millions of dollars of subsidization by local governments throughout the country. These subsidies take the form of bribes by local politicians trying to convince Wal-Mart to come to their town with the dream of significant job creation. Of course, from that follows a larger tax base. For example, a distribution center in Macclenny, Florida received $9 million in government subsidies in the form of free land, government-funded recruitment and training of employees, targeted tax breaks, and housing subsidies for employees allowing them to be paid significantly lower wages. A study by Good Jobs First found that 244 Wal-Marts around the country had received over $1 billion in government favors.

So now let’s look at the big picture. The final totals are $59 billion, 3 percent of the total federal budget, for regular welfare and $92 billion, 5 percent of the total federal budget, for corporations. So, the government spends roughly 50% more on corporate welfare than it does on these particular public assistance programs.

Should we spend less on corporate welfare and/or social welfare programs? Or should we spend even more? It’s up to you. A bunch of people died horrible deaths to make sure this country remained a democracy, so if you feel strongly about this issue you owe it to them to call or write your congressman and senators and give them a piece of your mind.

2013 Budget: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/budget.pdf

Source: Office of Management and Budget, Budget of the United States Government (Washington: Government Publishing Office), various years; and data from the American Association for the Advancement of Science R&D Budget and Policy Program, various years.

Source: U.S. Department of Agriculture, Economic Research Service, http://www.ers.usda.gov/data.

Source:  Export-Import Bank, 2006 Annual Report (Washington: Export-Import Bank, 2007).

Source Data from Chris Edwards at Cato:

Corporate Welfare by Agency

Corporate Welfare by Agency 2

Corporate Welfare by Company

I am extremely appreciative of any corrections or additional info that I left out.  Please include hyperlinked SOURCES.  I want to update this post with more recent numbers and more expansive definitions of both corporate and social welfare.

http://media.blubrry.com/thinkbynumbers/thinkbynumbers.org/wp-content/uploads/2016/10/tbn003_corporate_welfare_statistics.mp3

Podcast: Play in new window | Download

Before we look at the details, a heartfelt plea from the Save the CEO’s Charitable Trust:

There’s so much suffering in the world. It can all get pretty overwhelming sometimes. Consider, for a moment the sorrow in the eyes of a CEO who’s just found out that his end-of-year bonus is only going to be a paltry $2.3 million.

“It felt like a slap in the face. Imagine what it would feel like just before Christmas to find out that you’re going to be forced to scrape by on your standard $8.4 million compensation package alone. Imagine what is was like to have to look into my daughter’s face and tell her that I couldn’t afford to both buy her a dollar sign shaped island and hire someone to chew her food from now on, too. To put her in that situation of having to choose… She’s only a child for God’s sake.”

It doesn’t have to be this way. Thanks to federal subsidies from taxpayers like you, CEO’s like G. Allen Andreas of Archer Daniels Midland was able to take home almost $14 million in executive compensation last year. But he’s one of the lucky ones. There are still corporations out there that actually have to provide goods and services to their consumers in order to survive. They need your help.

For just $93 billion a year the federal government is able to provide a better life for these CEO’s and their families. That’s less than the cost of 240 million cups of coffee a day. Won’t you help a needy corporation today?

n. Financial aid, such as a subsidy, provided by a government to specific individuals.

When one thinks about government welfare, the first thing that comes to mind is the proverbial welfare queen sitting atop her majestic throne of government cheese issuing a royal decree to her clamoring throngs of illegitimate babies that they may shut the hell up while she tries to watch Judge Judy. However, many politically well-connected corporations are also parasitically draining their share of fiscal blood from your paycheck before you ever see it. It’s called corporate welfare. The intent here is to figure out which presents the greater burden to our federal budget, corporate or social welfare programs.

There are, of course, positive and negative aspects to this spending.The primary negative aspect is that you have to increase taxes to pay for it. Taxing individuals lowers their standard of living.  It reduces people’s ability to afford necessities like medical care, education, and low mileage off-road vehicles.The common usage definition of social welfare includes welfare checks and food stamps. Welfare checks are supplied through a federal program called Temporary Aid for Needy Families. Combined federal and state TANF spending was about $26 billion in 2006. In 2009, the federal government will spend about $25 billion on rental aid for low-income households and about $8 billion on public housing projects. For some perspective, that’s about 3 percent of the total federal budget.

Note: I do not consider Medicaid to be included in the term “welfare” as it is used in common parlance.  Typically, if one states that someone is “on welfare”, they mean that the person is receiving direct financial aid from the government.  If we included Medicaid in our definition of social welfare, we would also have to consider any service that the government pays for to be “welfare”.  For instance, public roadways to individuals’ homes would also be considered “welfare” under that expansive definition.

Another negative aspect relates to the fact that social welfare programs reduce the incentive for recipients to become productive members of society. However, in 1996, Congress passed a bill enacting limited welfare reform, replacing the Aid to Families with Dependent Children (AFDC) program with the new Temporary Aid to Needy Families (TANF) program. Now, with the recent changes in healthcare including Obamacare tax implications, some states are enacting strict criteria that a family must meet to be eligible for TANF. One key aspect of this reform required recipients to engage in job searches, on the job training, community service work, or other constructive behaviors as a condition for receiving aid. The bill was signed by a man named Bill Clinton, who is much better known for an act of fellatio which, of course, had far greater societal implications. Regardless, the success of this reform was pretty dramatic. Caseloads were cut nearly in half. Once individuals were required to work or undertake constructive activities as a condition of receiving aid they left welfare rapidly. Another surprising result was a drop in the child poverty rate. Employment of single mothers increased substantially and the child poverty rate fell sharply from 20.8 percent in 1995 to 16.3 percent in 2000.

Graph Source: http://census.gov/hhes/www/poverty.html

Now, let’s consider the other kind of welfare.

Definition: corporate welfare

n. Financial aid, such as a subsidy, provided by a government to corporations or other businesses.

The Cato Institute estimated that, in 2002, $93 billion were devoted to corporate welfare. This is about 5 percent of the federal budget.

Whenever corporate welfare is presented to voters, it always sounds like a pretty reasonable, well-intended idea. Politicians say that they’re stimulating the economy or helping struggling industries or creating jobs or funding important research. But when you steal money from the paychecks of working people, you hurt the economy by reducing their ability to buy the things they want or need. This decrease in demand damages other industries and puts people out of work.

Most of the pigs at the government trough are among the biggest companies in America, including:

However, the largest fraction of corporate welfare spending, about 40%, went through the Department of Agriculture, most of it in the form of farm subsidies. (Edwards, Corporate Welfare, 2003) Well, that sounds OK. Someone’s got to help struggling family farms stay afloat, right? But in reality, farm subsidies actually tilt the cotton field in favor of the largest industrial farming operations. When it comes to deciding how to dole out the money, the agricultural subsidy system utilizes a process that is essentially the opposite of that used in the social welfare system’s welfare system. In the corporate welfare system, the more money and assets you have, the more government assistance you get. Conversely, social welfare programs are set up so that the more money and assets you have, the less government assistance you get. The result is that the absolute largest 7% of corporate farming operations receive 45% of all subsidies. (Edwards, Downsizing the Federal Government, 2004) So instead of protecting family farms, these subsidies actually enhance the ability of large industrial operations to shut them out of the market.

Graph Source: http://ers.usda.gov/data

The same is true in all other industries, too. The government gives tons of favors to the largest corporations, increasing the significant advantage they already have over smaller competing businesses. If, in the court of public opinion, Wal-Mart has been tried and convicted for the murder of main street, mom-and-pop America, then the government could easily be found guilty as a willing accomplice. Wal-Mart receives hundreds of millions of dollars of subsidization by local governments throughout the country. These subsidies take the form of bribes by local politicians trying to convince Wal-Mart to come to their town with the dream of significant job creation. Of course, from that follows a larger tax base. For example, a distribution center in Macclenny, Florida received $9 million in government subsidies in the form of free land, government-funded recruitment and training of employees, targeted tax breaks, and housing subsidies for employees allowing them to be paid significantly lower wages. A study by Good Jobs First found that 244 Wal-Marts around the country had received over $1 billion in government favors.

So now let’s look at the big picture. The final totals are $59 billion, 3 percent of the total federal budget, for regular welfare and $92 billion, 5 percent of the total federal budget, for corporations. So, the government spends roughly 50% more on corporate welfare than it does on these particular public assistance programs.

Should we spend less on corporate welfare and/or social welfare programs? Or should we spend even more? It’s up to you. A bunch of people died horrible deaths to make sure this country remained a democracy, so if you feel strongly about this issue you owe it to them to call or write your congressman and senators and give them a piece of your mind.

2013 Budget: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/budget.pdf

Source: Office of Management and Budget, Budget of the United States Government (Washington: Government Publishing Office), various years; and data from the American Association for the Advancement of Science R&D Budget and Policy Program, various years.

Source: U.S. Department of Agriculture, Economic Research Service, http://www.ers.usda.gov/data.

Source:  Export-Import Bank, 2006 Annual Report (Washington: Export-Import Bank, 2007).

Source Data from Chris Edwards at Cato:

Corporate Welfare by Agency

Corporate Welfare by Agency 2

Corporate Welfare by Company

I am extremely appreciative of any corrections or additional info that I left out.  Please include hyperlinked SOURCES.  I want to update this post with more recent numbers and more expansive definitions of both corporate and social welfare.

The average American household paid $2,000 to bail out AIG. Your bill arrived without your consent. You paid it anyway.

It's like when someone orders bottle service at the club and then splits the bill evenly, except the someone is an insurance company and the club is the global financial system and you weren't even at the club.

Source: nicolasrapp.com

Image by Scott Pollack

A credit default swap is insurance for financial products. AIG sold this insurance. Then the products failed. Then AIG didn't have the money to pay out.

This is what insurance companies call "a problem." It's also what normal people call "not having insurance," but on Wall Street they use fancier words.

Think of it like selling flood insurance for every house in Florida and then being surprised when it rains. Except instead of rain it's the entire financial system collapsing, which was definitely impossible to predict if you weren't paying any attention whatsoever.

AIG got downgraded from AAA to A credit rating. This triggered provisions requiring AIG to provide billions in collateral to counterparties like Goldman Sachs.

AIG didn't have billions in collateral.

The government loaned AIG $170 billion. This was called a loan. Loans typically get repaid. This one won't.

As of 2011, $11.4 billion has been repaid. At this rate, full repayment will occur sometime after the heat death of the universe.

The word "loan" is doing a lot of heavy lifting here. It's technically a loan in the same way that setting money on fire is technically "outdoor heating."

Most of the money went to European banks. American taxpayers paid European banks because an American insurance company sold insurance it couldn't pay out. Capitalism for the poor, socialism for the rich.

It's a beautiful system. When rich people make bad bets, everyone pays. When poor people make bad bets, they lose their house. This is called "moral hazard," which is Latin for "we can do whatever we want."

Former AIG CEO Hank Greenberg testified to Congress that bankruptcy would have been better for taxpayers.

In Chapter 11 bankruptcy, AIGFP would be broken up and sold. Creditors would receive 20-30% of what they were owed.

Goldman Sachs received $12.9 billion from the bailout. They spent $18 billion on executive bonuses in 2007. So receiving only $3 billion from bankruptcy would not have destroyed them. It would have merely reduced executive compensation.

Congress asked Treasury to explain how AIG's bankruptcy would destroy the financial system.

Treasury declined to provide this explanation.

Goldman Sachs was Obama's number one campaign contributor. Goldman Sachs spent $43 million on political contributions.

They received tens of billions from the AIG bailout.

$43 million is a bargain.

$2,000 per household. That's what you paid to protect AIG's counterparties from the consequences of their decisions.

If AIG's bets had paid off, you would not have received $2,000.

Privatized gains. Socialized losses. The system works exactly as designed.

Source: insuranceproviders.com

http://media.blubrry.com/thinkbynumbers/thinkbynumbers.org/wp-content/uploads/2016/10/tbn008_what_if_aig_failed.mp3

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In 2008, Wall Street financial institutions gave loans to people who couldn't pay them back. This is called "bad business." The institutions were going to lose money.

They did not want to lose money.

Losing money is what happens to regular people when they make bad decisions. For banks, there's a different system. It's called "getting billions of dollars from the government." The two systems are very different, but both are perfectly fair depending on whether you're a bank or not.

The solution: have the Federal Reserve print new money and buy the bad loans for way more than they were worth. This process is called quantitative easing (QE).

Source: Visual Capitalist

Then the banks used taxpayer money to reward executives for their bad decisions.

Goldman Sachs, Morgan Stanley, and JPMorgan Chase paid $18 billion in bonuses in 2008. They received $45 billion in taxpayer bailout funds through TARP.

They turned $45 billion of your money into $18 billion of executive bonuses. The remaining $27 billion covered the losses from the bad bets they made.

This is called "accountability." The executives were held accountable by receiving millions of dollars in bonuses. It's a tough lesson, but someone had to learn it. That someone was you, and the lesson was "you're paying for this."

Source: Wall Street on Parade

The moral of the story for bankers:

When you make good investments, you keep all the profits.

When you make bad investments, the Fed gives you free money and losses get spread over the entire population.

This is called "moral hazard." It means rewarding failure creates more failure.

There are two types of inflation:

The Fed created $6 trillion in new money over 12 years. That's monetary inflation.

Source: Visual Capitalist

Annual price inflation has only been about 1.5% over the period. So where did the money go?

It went to asset prices. Stock prices. Real estate prices. The things rich people own went up. The things poor people buy stayed relatively flat.

This is how you transfer $6 trillion from everyone to the already wealthy without most people noticing.

It's the perfect crime. You print $6 trillion, give it to rich people, their assets go up in value, and poor people can't afford houses anymore. Then you say "inflation is only 1.5%" because bread prices didn't change. Everyone claps. The end.

http://media.blubrry.com/thinkbynumbers/thinkbynumbers.org/wp-content/uploads/2016/10/tbn006_us_pays_16000_per_worker.mp3

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This study by the Federal Reserve examines the effects of government intervention and the absence thereof in two similar financial crises which occurred simultaneously in Chile and Mexico. Chile liquidated the insolvent banks and instituted a new regulatory system to prevent future abuses. Mexico nationalized the entire banking system keeping the insolvent banks on life support at the expense of the taxpayer.

Sometimes I wonder if economic experiments are just countries playing Rock, Paper, Scissors with each other's futures.

This is what happened. Over the next 25 years, Chile's per capita GDP grew 100% while Mexico has exhibited an impressive 0% growth rate. This means the average Chilean is twice as rich as he was 25 years ago, whereas the average Mexican stayed just as poor as he was before. It's like one country took the stairs and the other took the escalator that was broken and just stood there.

The lesson is clear. If the government subsidizes bad behavior you get more of it. If the government taxes good behavior you get less of it. This raises the profound question: What if we subsidized good behavior instead? But that would be too simple, wouldn't it?

Yet that's exactly what were doing. We're taxing successful, competently run businesses to subsidize irresponsible, poorly run businesses. It's like punishing the kid who did their homework to reward the kid who ate it. Until we realize this simple fact, the previous trend of increased productivity and standards of living will only be a memory.

http://media.blubrry.com/thinkbynumbers/thinkbynumbers.org/wp-content/uploads/2016/10/tbn005_chile_mexico-government-intervention.mp3

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