Read original article: Why handouts are a bad way for state to help companies
The proof is in the pudding, people. Let’s just look at one bit of evidence. In 2011, the Star Tribune conducted an analysis of more than 650 job-creation deals put together from 2004 to 2009 that provided state and local tax breaks, low-interest loans, grants or other benefits. Of those projects, 125 companies didn’t meet their hiring requirement. At least 46 of those companies provided no lasting jobs at all.
That’s over a 19% failure rate and a 7% colossal failure rate. What gives, government? Why aren’t we fixing this broken system?
We are talking about wasted taxpayer money that runs millions of dollars high. Just gone, poof! There’s no return on these investments. Taxpayers don’t receive benefits like improved infrastructure, stronger schools or more cultural institutions. No, instead we get to watch $700,000 in our money go to Price Mechanical, a 68-year old Canadian company that doesn’t even need the money.
The consensus among economists for years has been that public incentives for private, for-profit companies are terrible economic policy. I agree. Something’s broke. We need to fix it.