American Economy: Economic power.

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American Economy 1

Running head:  American economy

American Economy:

 Economic power

Anthony A Hamilton

Westhills Community College

Sociology 2 – Social Problems

Professor Dr. Loyd Ray Ganey Jr.

May 12, 2003

American Economy 2

Abstract

The US’s economic system creates many problems throughout the world.  Recognized as the Worlds leader in Consumption and economic growth the US has established a presence throughout international borders.  Moreover, the US’s economic power has fueled controversy pertaining to global capitalism, corporate welfare, and consumption.

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Economic power

        Corporate welfare is, any action by local, state or federal government that gives a corporation or an entire industry a benefit not offered to others.  It can be an outright subsidy, a grant, real estate, a low-interest loan or a government service.  It can also be a tax break, a credit, exemption, deferral or deduction, or a tax rate lower than the one others pay (Barlett & Steele, 1998).

The federal government has done a lot to aid multi-million dollar industries throughout the last few decades.  Many corporations haven’t even paid taxes in years.  One would think that policies of this nature are seemingly unjust.  Millions of middle class tax payers can only dream of living in a society free of income and property taxes.  Nonetheless, practices of this nature are extremely common in the corporate world.  The underlying concept of “Corporate Welfare” is presented in a few different ways.  Sometimes noted as “economic development” or “Public-private partnerships.”  In all instances the government subsidizes corporations at the expense of tax paying citizens (Bovard, 1995).

        The Archer Daniels Midland Corporation is one of the biggest corporate welfare recipients to date.  Specializing in ethanol production, ADM and its chairman Dwayne Andreas have lavishly fertilized both political parties with millions of dollars in handouts

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and in return have reaped billion-dollar windfalls from taxpayers and consumers.  Large amounts of federal protection in the sugar industry, ethanol subsidies, and subsidized

grain exports have cost American tax payers billions of dollars in taxes and higher prices since 1980.   Approximately 43 percent of ADM's annual profits come from products that are heavily subsidized or protected by the American government. For instance, “every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30” (Bovard, 1995).  

 The Andreas family and ADM have contributed more than $4 million to congressional and presidential candidates, as well as to the national Democratic and Republican parties.  For instance, “ADM donated over $300,000 "in soft money to Democratic groups--roughly six times what they contributed to Republicans." (Stone, 1994)  ADM has been an extremely generous donor, for example; when Sen. Tom Harkin was being sued for libel in 1986 because of a campaign statement, Andreas donated $10,000 to a legal defense fund for Harkin. Also, when former president Jimmy Carter decided to get out of the peanut business, Andreas was there with a check for $1.2 million to help Carter promote Habitat for Humanity (Bovard, 1995).  

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The massive amount of donations handed out by ADM makes them look like a very generous corporation.  What’s misleading about ADM’s generosity is how much they benefit from the political organizations that receive the majority of ADM’s donations.  Resulting in ADM receiving such large amounts of corporate welfare leaving middle class citizens pay the bill (Bovard, 1995).  

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ADM is one of thousands of corporations that receive corporate welfare.  State and local governments across the country indulge in corporate welfare practices routinely.  Many giving corporations funds to relocate to a different city or building giving them ...

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