Mansion in Hamptons owned by Lloyd Blankfein, President and CEO of Goldman-Sachs, valued at $17 million
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Lost in the brouhaha over whether the US is ready for a president who is nominally a "socialist," is the fact we are already far down the road of socialism. Just not the kind most people think. The conservative CATO Institute estimates that the total for federal free lunches to corporate welfare queens in America amounts to over $100 billion per year. In addition to the federal handouts, the New York Times puts the total of state and local free stuff to corporations at $80 billion per year. With just these two figures, we are already up to $180 billion per year, and these reports do not take into account the one trillion dollar Pentagon budget, a legendary vehicle for waste, fraud, and weapons systems that even the Pentagon doesn't want which benefit huge corporations.
If defense contractor shareholders want it, and they pay enough congressmen through our system of legal bribery through campaign donations, it doesn't matter if the Pentagon doesn't want the weapons system. These represent handouts of billions.
Just three controversial programs, the F-35 joint strike fighter, the M--1 Abrams tank, and the Littoral Combat Ship, add billions a year to the corporate welfare budget. The shareholders at companies like Lockheed-Martin and Boeing are getting a lot more than free Obama phones.
In 2012, Army Chief of Staff Ray Odierno told Congress in as blunt a terms as he could come up with about the M-1 Abrams: "We don't need the tanks."
The Pentagon's potential as a slush fund and front for Grand Theft Taxpayers became clear when former Defense Secretary Donald Rumsfeld announced, on the day before 9/11, that $2.3 trillion was unaccounted for. This is more than twice the size of the Pentagon's yearly budget. The possibility reared its head that the Pentagon budget was one big feeding frenzy for contractors and Washington insiders.
To this day, the Pentagon, where 20 cents of every taxpayer dollar winds up, still cannot pass an audit,
CommonDreams.org estimates the value of subsidies and tax breaks to large corporations and wealthy individuals at well over $600 billion, for an appalling average of more than $6,000 for an American family in the $74,000 tax bracket. By this reckoning, if a family paid $20,000 in taxes, about a quarter of that went to bolster the bottom lines of people who make more than they do. Like CEOs who live in $10 million mansions.
Warren Buffet's Berkshire Hathaway has received over $1 billion in public largess, according to Forbes Magazine. The popular investment site Motley Fool determined that Buffet takes advantage of a loophole in the tax code which taxes dividends from a company at zero percent. Buffet is worth an estimated $58 billion. In 2009, he paid $7 million in federal taxes on a gross income of $63 million, or a rate of a little over 10%. That same year, reported Huffington Post, 1,400 American millionaires paid no US income taxes.
True, this is only anecdotal evidence. But it's a pretty good bet that what Buffet knows how to do, other billionaires and millionaires know how to do also.
For perspective, the present total of what most people think of as welfare payments (Temporary Assistance for Needy Families - TANF) and food stamps (Supplemental Nutrition Assistance program - SNAP) is about $100 billion annually: about $80 billion for food stamps and $20 billion for welfare. The third major line item for the poor is Medicaid, at around $475 billion in 2014. But half those beneficiaries are children, and half again of those who remain are disabled.
Using these figures, total basic assistance to able-bodied poor comes out to just under $350 billion per year. Approaching it a different way, the conservative Heritage Foundation published a report which lumps into "welfare" all means-tested federal and state programs, including Pell Grants, Head Start, and worker training. The Heritage Foundation arrives at a figure of $714 billion in 2008, which would be about $100 billion more now, given increases in Medicaid spending. This gives a total of all "means-tested" assistance of roughly $800 billion. The Heritage Foundation then acknowledges that "roughly half of means-tested spending goes to disabled or elderly persons." Thus we again arrive at an upper limit figure of around $400 billion, give or take, of what can properly be considered outright welfare, unless social insurance programs meant to keep the blind and elderly from sleeping in alleys are now unwarranted hand-outs.
$600 billion in corporate welfare versus $400 billion in "welfare" welfare. Welcome to socialism in America. The dirty little secret is that there is lots of it. The dirtier little secret is that there may be even more for the rich than for the poor.
And we not yet begun to talk about bank bailouts. Former Special Inspector General Neil Barofsky, heralded from left to right as one of the most honest men in Washington, until he was forced to leave, put the worst case exposure of the American public to bad risks taken on by banks at an incredible $23.7 trillion, were the financial system to crash beyond recognition and all obligations to come due at once. The $700 billion TARP bailout, said Barofsky, is only the tip of an iceberg which could send a hundred Titanics to the bottom of the ocean.
David Brunori of the conservative Forbes Magazine writes:
"The largest, wealthiest, most powerful organizations in the world are on the public dole. Where is the outrage? Back when I was young, people went into a frenzy at the thought of some unemployed person using food stamps to buy liquor or cigarettes. Ronald Reagan famously campaigned against welfare queens. The right has always been obsessed with moochers. But Boeing receives $13 billion in government handouts and everyone yawns, when conservatives should be grabbing their pitchforks."
Most corporate subsidies go to companies which hardly need them. Most oil industry subsidies go to the five biggest oil companies, the "Big Five," which together reported $93 billion in profits in 2013. The CEOs of these companies average about $20 million a year in compensation. And the CATO Institute tells us that farmer subsidies go "mainly to large corporate agribusinesses and the richest farmers." The CATO Institute found that:
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