In a recent post on earmarks and federal grants, I cited the crazy example of HUD’s Community Development Block Grant program funding facade renovations for a wine bar in Connecticut. Now a Michigan newspaper reports that Bell’s Brewery in Kalamazoo is looking for $220,000 in CDBG money to expand its facilities.
I consider Bell’s to be one of the finest breweries in the United States. Bell’s desire to expand its production facilities reflects its success in getting people to part with their money voluntarily in exchange for their products. Now federal taxpayers, whether they like Bell’s or beer, could effectively be forced to give their money to Bell’s.
There are over 1,500 craft breweries in the United States. Those breweries must pay federal taxes, so if Bell’s were to receive its grant, then the federal government would basically be forcing the other breweries to subsidize a competitor. Should the federal government therefore be in the business of subsidizing all craft breweries in the United States? It’s doubtful that any federal politician would answer in the affirmative. Why then the special treatment for Bell’s?
This is a perfect illustration of why government subsidies for economic development are immoral. Politicians and their benefactors justify the redistribution by pointing to the jobs and development created (often allegedly) by the subsidies. But they completely ignore the fact that the handouts cannot occur without money being taken out of somebody else’s hand first. Therefore, what politicians innocuously label as “economic development” can also accurately be labeled as “theft.”
As a Cato essay on community development programs states, “Community development is a local concern, and only local leaders and businesses using their own funds can make sound cost-benefit decisions on projects.”