Cutting Government Subsidies is a Win-Win Scenario

Originally posted on www.nkreider.com on March 22nd, when the discussion of budget cuts was in the news. The concepts and the argument is still relevant, despite the news being somewhat old.

Donald Trump’s presidency has heavily influenced a discussion on government subsidies, especially with the release of a budget plan by his administration. This plan cuts entire budgets for at least 11 agencies and, according to CNN, makes cuts to nearly every other agency excluding Defense, Homeland Security, and Veteran’s Affairs. Public figures, primarily from the left, have taken to social media to complain about these cuts. But all of them thus far are based on logical fallacies and nonarguments. The wonderful thing about cutting government subsidies is that, regardless of the outcome, it will be a good move.

What’s Wrong With Government Subsidies?

Government subsidies create inefficiency. The market automatically decides which entities deserve funding and which do not. It’s simple. If you enjoy something, you fund it. Put more simply, if you want something, you buy it. Likewise, if you don’t like something, you won’t buy it. A majority of people don’t have to like a product for it to exist, either. A product only needs enough revenue to continue production. The organization behind this product will grow if the product is good, and shrink if the product is bad. You can determine what you want by ‘putting your money where your mouth is’. Even free products like YouTube videos and most media earn a profit from ads. If you continue to visit media websites you enjoy, increased ad revenue will allow them to grow.

With government subsidies, however, we cannot determine if a program is necessary or not. It may sound great, and it may do some good. It might also be cheap per citizen. Unfortunately, we have no way of knowing if there would be a better alternative to this program without market forces.

Take PBS for example, which receives government funding. If we measure media by the quality of their 2016 election night specials, PBS is easily trailing in last place. RT America provided 12 hours of content with numerous interviews. Right Side Broadcasting provided 5 hours of coverage. Fox Atlanta provided 9 hours, and ABC provided 8 hours. PBS provided 9 hours. What makes PBS different is their content. An interview with Nancy Pelosi was repeated three times, with numerous breaks for repeated advertisements. Even with these ads, they still claim to require government funding.

What Will Happen to Programs Without Subsidies?

There are two things that can happen if a program loses subsidies. Either people will voluntarily pay for it, or they won’t. If they do, like the case of Planned Parenthood, then the program didn’t need government funding. People were willing to pay for it, and the program will still exist. If people do not donate to a program, then it’s quite clear that the program is not needed. Not enough people cared about the program to keep it running, therefore it should not exist. This logic has been absent on much of the pro-government activism. These people have been celebrating victory when donations rise to programs under threat of losing funding. This only strengthens the argument for cutting subsidies, as explained earlier.

No matter the outcome, cutting subsidies is a victory for small government, efficiency, and the American taxpayer. Cutting funds will allow us to see which agencies are truly desired by the people, and which agencies are unwanted.