Wisconsin Republicans, bow before your new welfare queen!
While the Johnson campaign is calling the Feingold ad above "complete lie" because it refers to industrial revenue bonds that Johnson received as a "government loan," they likely would prefer Feingold's descriptor over the Cato Institute.
That's Cato Institute as in the free-market, pro-business, Republican-leaning, Cato Institute, who in a report entitled, "The Poltical Economy of Corporate Welfare: Industrial Revenue Bonds," not only calles IRBs "corporate welfare," but says they are bad for the economy:
Industrial revenue bonds tend to distort, rather than fàcilitate, the market process. Both consumer sovereignty and production efficiency are compromised when IRBs are used to support failing or inefficient business enterprises. Further, the increasing use of IRB finance alters relative prices, which makes more costly for consumers and producers to make accurate decisions regarding resource uses. The entrepreneurial process whereby resources are put to their most highly valued uses is disrupted. In essence, IRB finance substitutes political resource allocation for the market allocation of resources, and the results are neither efficient nor equitable. The economy's productive capacity is reduced when IRBs are used to selectively help some firms through special tax exemptions chosen by political rather than economic criteria, and when resources are used to obtain such exemptions rather than to produce additional goods and services.
Wait: It gets better. In 1998, Time ran a cover story entitled, "What Corporate Welfare Cost You," and specifically references IRBs as the origination of states using corporate welfare i,n the race to the bottom of attracting corporations to their state:
In 1936, in the midst of the great depression, Mississippi fired the first shot in what is now an internecine, multibillion-dollar battle for jobs among the states. The idea was simple enough: lure businesses from the North with offers of cheap and abundant nonunion labor, low-priced land, minimal taxes and, for the first time, state-sponsored, tax-exempt industrial-revenue bonds. In other words, a coordinated effort to raid other states for their corporations.
The Congressional Budget Office is a little friendlier to IRBs and simply calls them a "subsidy," but in a 1981 CBO report complained that subsidy was costing taxpayers billions in lost revenue, saying:
Since interest income from the bonds is exempt from federal taxation, private businesses can borrow at below-market interest rates. In effect, the federal government gives up revenues in order to subsidize the borrowing costs of private industry.
The use of IRBs has sky rocketed since the 1980s and if IRBs were costing the government an estimated 4.6 billion 25 years ago, we can assume that number has at least tripled.
This is all of special interest considering that when Ron Johnson addressed the Republican convention he made attacking "welfare" a central theme of his speech, saying:
Both the idea and the promise of America are losing ground. For decades and for reasons of true compassion and altruism, our nation has embarked on a grand experiment to eliminate hardship and poverty the result has been the exact opposite: I know. I live threw it. We have all witnessed it. Our culture has coursened. Poverty rates have not declined. And a culture that once celebrated hard work and success is slowly, but surely, being replaced by a culture of entitlement and dependency.
Johnson was right in a way-- except the "culture of entitlement" gun he is pointing around, should be pointed at the the wealthy and corporations. They are the ones that have increasingly gotten more and more tax breaks and subsidies from the government and the results are painfully clear: the rich are wealthier than at any time in our nation's history and everyone else is suffering.
Culture of entitlement, indeed.