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Cato Institute Case Study

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The American University of Rome
Introduction to American politics
Renzo Reffo

The Cato institute is American public policy research organization, “think tank”, based in Washington, DC. The institute was established to focus on public avocation, media exposure and social influences. They are dedicated to the principles of individual liberty, limited government, free markets and peace. It has published numerous policy studies, briefing papers, periodicals, and books. I will examine the section corporate welfare and earmark from their text “Cato’s handbook for policy makers”. The publication was a collaboration of numerous experts and prepared by Chris Edwards, is director of tax policy studies at the Cato Institute, and Jeff Patch, is a former …show more content…
This disregard of public interest is due to the strong incentive for organization to lobby for continuation of these subsidiaries and small motivation for a private citizen, as each program only makes up a fraction of their tax bill. When citizen do speak out against these programs, it is likely that professional lobbyist will confront them. These professionals have the advantage of additional information and are program experts, who are familiar with the complexity of most federal plans. There is also very little transparence regarding the success of these programs as lobby groups and congressional supports vest their reputation and careers in the continuation of these programs. The congress can also pass special interest legislation in which cost outweighs the benefited provide by the program and that is the key to gaining political support through the complexity of logrolling, vote trading. This system strengthens the pro-spending bias of the congress and result in programs get approved that make no economic or social …show more content…
The federal government spends about $90 billion annually on corporate welfare that includes direct cash payments and indirect benefits, such as loans, research, and marketing support for businesses. In addition corporate welfare comprises of barriers to trade, intended to protect local businesses from foreign competition, and domestic regulations that present advantages on certain companies at the expense of consumers and the general economy. There are various issues regarding the creation of subsidies. One of those issues is the cost to taxpayer and how that money could use to benefit the population in a more efficient way. Corporate subsides create disadvantage for business that do not have political connections and subsidize a failing company creating a slump in the economy due to the poor management or second-rate products of that company, creating a weaker private sector. Corporate welfare generates an unhealthy relationship between businesses and the government. One scandal in 2002 involved the Maritime Administration’s loan program for shipbuilders. When the government aids some businesses, it often damages other businesses. Considering federal importation quotes on sugar have pushed up U.S. sugar prices to double the world level. The high prices for sugar have hurt U.S. candy companies, of which many have moved their production

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