tivities include making direct loans to those buyers at below-market interest rates, guaranteeing the loans of private institutions to those buyers, and providing export credit insurance to exporters and private lenders. Similarly, the Overseas Private Investment Corporation ($70 million a year) provides direct loans, guaranteed loans, and political risk insurance to U.S. firms that invest in developing countries.The Problem with Corporate Welfare Corporate welfare programs are often purported to be pro-business. They are not. Such programs do nothing to promote a freer economy. They make it less free. Here are seven reasons why such policies are misguided and dangerous: The federal government has a disappointing record of picking industrial winners and losers. The average delinquency rate for government loan programs (8 percent) is almost three times higher than that for commercial lenders (3 percent). The Small Business Administration delinquency rate reached over 20 percent in the 1980s, and the Farmers Home Administration delinquency rate has approached 50 percent. Corporate welfare is a huge drain on the federal treasury. Every year $75 billion of taxpayer money is spent on programs that subsidize businesses. Meanwhile, politicians proclaim that America cannot afford a tax cut. Corporate welfare creates an uneven playing field. By giving selected businesses and industries special advantages, corporate subsidies put businesses and industries that are less politically well connected at a disadvantage. Corporate welfare fosters an incestuous relationship between business and government. All too often, the firms and industries that contribute the most to political campaign coffers are the largest recipients of government handouts. Corporate welfare programs are anti-consumer. For instance, the Commerce Department has estimated that the sugar subsidy program costs consumers several billion dollars a year in higher prices. Corporate welf...
