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Cut Government Waste

Vote for the Paul Amendment
D ear Colleague, July 29, 1997

Corporate we lfare is government was te--both bad politics and bad economics.
The Export Promotion schemes in the Foreign Appropriations bill take money from the taxpayers--from t he productive s ectors of the economy--to give to companies t hat contributed to political candidates, lay off American workers (often shipping U.S. jobs abroad), and feed at the government trough. This misdirection of investment capital causes inefficiencies that raise unemployment rates and lower economic growth rates. According to the Center for Responsive Politics, OP IC’s clients donat ed a t otal of $27.4 million in PAC and soft money contributions to federal candidates and parties in the 1996 election cycle--a great return on their investment, even as pandering politicians claim there is no connection. Handout requests: OPIC w ant s $80 million in new taxpayer money, Export-Import Bank wants $632 million in new t axpayer money, Trade Development Agencyw ant s $43 million more.

This money goes to politically well-connected companies with poor records of creating jobs. M any of its recipients have in fact downsized their workforce and shipped abroad: Boeing Inc., t he top recipient of corporat e welfare from the Ex-Im Bank, slashed its U.S. workforce from 155,900 to only 103,600 employees in the past s ix years. N ow Boeing w ants the U.S. t axpayer to reward them for laying off 1/3 of t heir American workforce! General Electric,t he second largest recipient of Ex-Im welfare, slashed its American workforce from 667,000 in 1975 to only 398,000 twenty years later--cutting 2 9,000 w age 6 earners from employment in the U.S. yet GE maintains its reputation for shipping jobs abroad. “Corporate welfare does not work anywhere in the world. I does not work because it t penalizes a country’s winners with excess taxes in order to fund that country’s losers with inefficiently run government programs,” testified Dr. T.J. Rodgers , Pres ident and C.E.O. of Cypress Semiconductor Corporation, before Congress in 1995. “ ‘T hey’ve got subs idies; we

need subsidies,’ is exactly wrong. America will be much more competitive on a relative basis if we allow the nations with whom we compete to squander their taxpayers’ money, while we encourage our companies to win without subsidies. It’s like the Olympics: there comes the day when an athlete must walk alone into the arena of competition. T he government cannot lift the weights and run the miles that are required to be a champion--only an individual can.” According to the Congressional Research Service, “ In es sence, by s ubsidizing exports directly, or indirectly by subs idiz ing overs eas direct invest ment , domes tic producers trans fer income to foreign consumers who pay less for the goods they buy because of the subsidy”. When other nations subsidize our imports and other nations’ imports, it frees up money to purchase more net U.S. goods (CRS memo July 28, 1997, P rice and Income Effect s of Export Subsidies).

Our trading partners are taxing their citizens to boost the U.S. economy!
Let’s not tax our citiz ens to boost their economies ! Vote for the P aul amendment! Sincerely, Ron Paul, M.C.