These have been justified by proponents as necessary to enhance U.S. competitiveness in the world economy, encourage the development of high technology products and research, maintain a strong national defense, or assist socially disadvantaged groups. Experience indicates that most spending subsidies for business do not achieve their goals and are not in America's economic interest. These subsidies can be expensive and actually hurt the economy. Subsidizing one business or industry rather than another distorts private investment decisions, taking resources from more efficient uses. Allowing farmers to make their production decisions based on market forces rather than government subsidies would result in a far more efficient farm economy.
Some subsidies are just a waste of money, providing little economic benefit.
Rather than end corporate welfare, Clinton's budget actually would add the high technology and information services sectors to the list of heavily subsidized industries. The nation's economy has been shifting from manufacturing to a high technology and information services base. This has been occurring without government help. But the Clinton Administration wants Congress to enact generous subsidies to promote high technology products and research. Spending subsidies too often either enrich those who have already detected good profit opportunities or direct private capital into less efficient investments.