If Trump Wants American Businesses To Thrive, He Should Get Rid of Government Subsidies

Federal subsidies undermine American companies, breed dependency, and stifle competition.

Do American businesses require government subsidies to thrive?

In a Thursday post on Truth Social, President Donald Trump wrote: "Everyone is stating that I will destroy Elon [Musk's] companies by taking away some, if not all, of the large scale subsidies he receives from the U.S. Government. This is not so!" He added, "I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before!"

It's not entirely clear if Trump will cut subsidies to Musk's companies. But during a press briefing a day earlier, White House press secretary Karoline Leavitt said, "I don't think so. No." when asked if the president supports agencies contracting with Musk's xAI.

The federal government spends $181 billion a year on "direct cash subsidies" and "indirect industry support" for private businesses, according to a March study by Chris Edwards, the Kilts Family Chair in Fiscal Studies at the Cato Institute.

In June, during a public feud between the two men, Trump posted that the easiest way to cut spending would be "to terminate Elon's Governmental Subsidies and Contracts," adding he was "always surprised that Biden didn't do it!" Musk's Tesla Model S was launched with a $465 million Department of Energy loan, and his company has received $11.4 billion in state and federal subsidies, according to a February report by The Washington Post.

It's not just Musk's companies, though—the government trough is open for businesses from all industries, including agriculture, aviation, broadband, energy, education, hospitality, housing, manufacturing, transportation, and others. The $42.5 billion Broadband Equity, Access, and Deployment (BEAD) program, which aims to provide internet access to underserved and rural areas, has connected zero people. Annual farm subsidies can range "between about $15 billion to $30 billion per year," according to a Cato Institute report. 

Recent spending bills are littered with government subsidies that overpromise and underdeliver. This includes $684 million spent on eight nonoperational coal carbon-capture plants over the past 15 years, $387 million spent on a failed "clean coal" power plant in Mississippi, and $200 billion stolen from the Small Business Administration's Economic Injury Disaster Loans (EIDLs) and Paycheck Protection Program (PPP) programs. "Everyone wants the United States to be at the leading edge of industry," Edwards tells Reason, "but the way to do that is for the federal government to get it out of the way and to provide an open playing field for everyone."

Yet the administration has a mixed record on subsidies in recent weeks. As part of the $9.4 billion rescissions package, Congress recently voted to cut subsidies for public broadcasting. Now, NPR and PBS have to obtain all, rather than most, of their funding from donors and sponsorships. The One Big Beautiful Bill Act claws back $500 billion in energy subsidies but also includes $52.3 billion in spending on the farm safety net, the most significant agricultural subsidy provided by the government. 

Trump's tariffs are also "akin to corporate subsidies as well", says Edwards, with industries already facing the effects of protectionism lobbying in Washington for favorable treatment. It's consumers who get the short end of the stick in all this, although the administration seems to be OK with this outcome. Worryingly, Trump has at times attempted to assert the executive branch's power over private companies, such as his executive order to "combat illegal private-sector DEI preferences, mandates, policies, programs, and activities," and those targeting various law firms. 

When companies hitch their wagon to federal funding, it makes it easier for the government to wield the power of the state against them. Edwards argues that "protecting U.S. businesses through subsidies or tariffs makes them complacent and less competitive." True competitiveness, he adds, comes from being "subjected to the full rigors of the market."

If Trump wants American businesses to "THRIVE, in fact, THRIVE like never before!" he could act on his promise to "cut Hundreds of Billions of Dollars in spending," by calling on Congress to cancel all federal subsidies and allow American businesses to thrive, or fail, on their merit.

Comments

[sarcasmic]

Oh yeah? Well other countries have high tariffs and subsidies to keep domestic businesses afloat. How can America compete with that? It can't. That's why we need high tariffs and subsides. And government ownership in companies too. That's why China is kicking our ass economically. The government has ownership in companies, subsidizes them, and tells them what to do. We'll never be able to compete unless we go full fascist too!

[Don't look at me! ( Is the war over yet?)]

Note to any new readers:
Sarcasmic is having a hard time since last November, so pay no attention.

[damikesc]

Sarcasmic is not generating content?

Shocking.

[SCOTUS gave JeffSarc a big sad]

Not true, Sarc generates new content every time he gets blackout drunk and passes out, which is daily. As he always wakes up in a pool of his own urine and vomit. Sometimes fecal matter too, although I think he has a cleanup deal with SQRLSY for that.

[Chumby]

Check out his page where he gets drunk for viewers at OnlyCans.

[Incunabulum]

He wants us to be more like Europe - he's just mad it's Trump doing it.

[Spiritus Mundi]

Poor sarc.

[SCOTUS gave JeffSarc a big sad]

Pour Sarc indeed.

[Spiritus Mundi]

*Breaking*

District court judge preempts Trump's attempt to get rid of government subsidies with nation wide injunction.

Reason praises checks on despot Trump!

[sarcasmic]

Once again Trump defenders, like the leftist they have so much in common with, conclude that opposing how something is being done equals opposing what is being done. Trump is a wannabe dictator who is attempting to rule by decree, as if his word is law. Judges are pushing back and saying that laws come from Congress, not presidential diktat. Trump defenders conclude that anyone who objects to how Trump is trying to cut government opposes cutting government. Just like leftists they assume that opposition to the how equals opposition to the what. Just like leftists. They might as well be leftists.

[GOD OF PENGUIN ISLAND]

So can Trump get rid of subsidies or not?

[SCOTUS gave JeffSarc a big sad]

It’s Sarc. If a trump gets rid of subsidies, he’s wrong. If he doesn’t, he’s wrong. That’s the Sarcasmic way.

[Spiritus Mundi]

I thought you muted me. Guess I will have to try harder

[DesigNate]

The headline of the article is literally calling for Trump to remove subsidies, which is what Spiritus is riffing on…

[JesseAz (Prime Meanster of Sarcasia)]

Yeah. This back and forth by reason is so damn confusing. First they rage at DOGE and their audits demanding congress fix things not Trump. Then they rage about the BBB. Now they want trump to end subsidies without congress. Yet last week they were defending subsidies to Columbia and harvard. Meanwhile paying almost zero attention to recission bills and cuts. Almost like their principle is not in regards to cuts and subsidies but something else... cant figure it out.

[Neutral not Neutered]

The Democrats and lame stream media heads 2025 hate fuelled downward spiral of leftist confusion about how after throwing every possible rock, stone, smear, lie, unicorn and unlawfully cheating at every turn couldn't frame, derail, remove or imprison or beat the guy they knew if they didn't eventually beat they would be caught for all their theft, lies, cheating, conspiring, corruption, and deceit of the American people.

Sad thing is Bill Ayers wrote and taught this destruction form within along with a few others so it's not like people do not know or could not know what the jig is and where it's coming from.

I am glad that someone might finally be held accountable.

For Reason on the other hand, less payola in the direction of truth and fact. Misdirection and the will of the left backed by Soros, China and Iran gives the best massages and vacation spots.

[SQRLSY]

https://www.buzzfeed.com/michaelabramwell/reactions-trumps-tweet-about-law-violation
"He who saves his Country does not violate any Law." Said Dear Orange DickTator.
"Wants to be a dictator. If you don't see it it means you don't want to," former Trump White House Communications Director Anthony Scaramucci said.

Mussolini: “Everything within the state, nothing outside the state, nothing against the state.”
Shitler: “The good of the state stands above the state.”
Napoleon: “I am the revolution.”
Francisco Franco: “I am responsible only to God and to history.”

[SQRLSY]

Excuse my typo; Correction below...

Shitler: “The good of the state stands above the law.”

Shitler: “The good of the state stands above the LAW.” For emphasis and my typo... Of all of the quotes, this one most clearly shows that Shitler and Orange Shitler are Bros... Piss in a pod, who want to piss on us all, and turn us all into Pod People!

[Incunabulum]

Remember that these are the people who were happy when Biden was elected because 'the adults are back in xharge'.

[Chumby]

You nailed it. Subsidies are in the realm of congress. But a Reason writer thought he’d tosin a strawman.

[SQRLSY]

"Subsidies are in the realm of congress."

So are tariff-taxes. Does Dear Orange DickTator give a shit about that?

[NCMB]

“So are tariff-taxes.”

“The Constitution grants Congress the power to regulate foreign commerce, impose tariffs, and collect revenue. As discussed in this report, Congress has long enacted laws authorizing the President to adjust tariff rates on goods in certain circumstances. Courts have generally upheld these laws against constitutional challenges, holding that they do not impermissibly delegate Congress's legislative power over tariffs to the executive branch.”

You can read all about it here: https://www.congress.gov/crs-product/R48435

[SQRLSY]

There are no results for "District court judge preempts Trump's attempt to get rid of government subsidies with nation wide injunction." So Sayeth the The Google, Which Knoweth All Things.

The Google, Which Knoweth All Things, in odor to be extra helpful, pointed out to me, this VERY revealing quote from Evil Spiritus Mendacious Mundi: "I just LOEV to incite hateful tribalistic killing, raping, pillage, plunder, torture, cannibalism, terror, death, destruction, and war, because I just LOVE to Suck Orange Satan's YUUUUGE Orange Dick, and because I am a Servant, Serpent, and Slurp-Pants of the Evil One, and I can and swill swillfully, joyfully suck down ALL the emissions originating from Shit's Evil Pants. With endless LIES, of course. Lies repeated often enough, hatefully enough, becum TRUE!!!"

[Doug Heffernan]

Michael Dunne, a former General Motors executive, says the reason that BYD has quickly produced the highest quality electric car at the lowest price is:

“How did BYD pull this off? Government subsidies!”

Link to source:
https://archive.is/5BZz5

I suppose Tosin Akintola thinks that this is not true, or can only work for the Chinese.

[sarcasmic]

Great point. That's why we need tariffs and subsidies. Nothing makes a country great like taxing and spending. But you missed one crucial piece. The Chinese government takes a stake in any company that does well so it can tell it what to do. You know, fascism. That's what we're really missing. Trump did it with US Steel, but that's not enough. The federal government needs a "golden share" in any business that does well, so it can tell it what to do. Only then can we really compete with China.

[Neutral not Neutered]

LOL you think China is superior to the US and the US needs to be like China to compete with them?

[sarcasmic]

That’s what Trump defenders say. I saw like three people in the comments objecting to the nationalization of US Steel. The rest gave silent approval. And the “they do it so we need to do it too” attitude is standard, hence my mocking you with “Democrats did it first that makes it ok” comments. Or this “China did it first” comment. So the comment you responded to was a mockery of you and other Trump defenders because it’s where your preferred policies lead. You’re just too willfully ignorant to see it. But you lack the foresight and self awareness to see you’re just like the leftists you hate.

[Doug Heffernan]

Tosin Akintola includes a quote in this piece:

"True competitiveness ... comes from being subjected to the full rigors of the market"

But the US is not the entirety of the market!

Americans can complain about it all they want about China providing government subsides to Chinese companies, but China isn’t going to scrap this model just because we don’t like it.

And American companies still have to compete with those foreign companies that get government subsides. So, the "full rigors of the market" that Tosin Akintola talks about in this piece will always include competitors that get government subsidies. Akintola's argument that congress should be called upon to eliminate all subsidies can't eliminate all non-US subsidies.

If Akintola thinks that the US can decouple from China if they provide subsidies to Chinese companies like BYD, it's not likely to work. Because BYD is already on track to rule all markets besides the US. And US consumers won't have access to cheap $10K quality BYD cars.

[sarcasmic]

Subsidies and other protection from competition (like tariffs) breed compliancy and stifle innovation, which makes companies competitive.

In other words, you missed the entire point of Akintola's quote.

[Doug Heffernan]

Nothing I said is inconsistent with any of that.

Tariffs are bad. Full stop. Import restrictions are bad. Full stop.

But Chinese government subsidies to Chinese companies are not only an example of a case where subsidies have been successful (for those Chinese companies), they also demonstrate that there can't be a global level playing field without any subsidies.

Are you saying that US companies (or multi-national companies based in the US) will be better able to compete with heavily subsidized Chinese companies just by eliminating subsidies to US companies?

If China can deliver a finished product (such as a car or smartphone), ready to sell at retail for less than it would cost to manufacture in the US, elimination of subsidies to US companies is not likely to make the US company any more competitive on the US or global markets.

[sarcasmic]

Tariffs are bad. Full stop. Import restrictions are bad. Full stop.

Strawmen are bad. Full stop.

Tariffs are not bad in an of themselves. Low tariffs can be a good source of revenue. The problem is using tariffs to intentionally interfere with trade.

But Chinese government subsidies to Chinese companies are not only an example of a case where subsidies have been successful (for those Chinese companies), they also demonstrate that there can't be a global level playing field without any subsidies.

Ever heard of cutting off your nose to spite your face? When another country uses taxes to subsidize industries with the effect of lowering prices, how is that bad for customers? If anything it's a gift. My response would be "More please." But politicians see that and their first impulse is to raise import taxes to make those things more expensive, and to then take tax dollars and give them to domestic industries. How is taxing and subsidizing better than enjoying lower prices? Any economist worth his salt will say it's not.

If China can deliver a finished product (such as a car or smartphone), ready to sell at retail for less than it would cost to manufacture in the US, elimination of subsidies to US companies is not likely to make the US company any more competitive on the US or global markets.

If another country has a comparative advantage due to subsidizing industries, then the choice is between enjoying those lower prices or government intervention to prop up companies that can't compete.

I choose the former, you apparently choose the latter.

Remember that the purpose of production is consumption, not jobs. If the purpose of production is jobs, then we may as well pay people to dig holes and fill them back up again.

[Don't look at me! ( Is the war over yet?)]

Digging holes and filling them is not production. You end up with nothing.

[Rev Arthur L kuckland (5-30-24 banana republic day)]

That and tons of stolen ip and r and d, and slave labor

[GOD OF PENGUIN ISLAND]

Does the executive have the authority to get rid of subsidies?

[Chumby]

Not unless you tosin salad of words.

[Minadin]

Relatively certain Obama knows about tossin salads.

[SCOTUS gave JeffSarc a big sad]

And Harris is the word salad specialist.

[IceTrey]

For America to thrive give us liberty and prohibit government coercion.

[MoreFreedom]

"The One Big Beautiful Bill Act claws back $500 billion in energy subsidies but also includes $52.3 billion in spending on the farm safety net"

So, Trump basically cut ~$450 billion in subsidies. That's a great start IMHO. But the author writes "Yet the administration has a mixed record on subsidies in recent weeks."

As a libertarian, it seems to me that import taxes are one of the better taxes in the benefit to buying local it provides. I'd rather the government run on import taxes than income taxes like it did for over 100 years.

[sarcasmic]

I'm with you. The problem though is that Trump's tariffs are protectionist. They're meant to raise prices to the point where people buy domestic equivalents instead. So any revenue is incidental. Tariffs designed for revenue must necessarily be low, so as to not discourage people from buying the taxed products. And while it would be great if tariffs could replace the income tax, two things would have to happen. The tariff rates would need to be in the neighborhood of 200%, and consumers would have to suck it up and not change their behavior. Neither of which is going to happen in reality. So if you want to replace the income tax with tariffs, government is going to have to shrink. Like big time.