Tax Payer Money Used to Destroy the Free Market?

by VINCENT GIOIA July 17, 2010
America became a great country by letting its people be all they can be without interference from government. In just less than two years all this has changed. We have seen the government dictate everything from toilets to light bulbs and take ownership interests in private enterprises in major segments of our economy. The formerly largest auto company has been taken over by the government and major banks now have the government sitting on their boards. The free market is no longer free and government expansionists are not through yet. Fully one-fifth of our economy in the form our health industry has come under the control of those running the government and under the guise of controlling alleged pollution by the same substance we exhale virtually all the remaining remnants of the free market will be subject to bureaucratic regulation if the Democrats and the Obama administration have their way.

How did this happen and how does the government take over our lives? The answer is simple, with our own money – money earned under what once was a free market system and confiscated by tax laws.

Since the 1930’s under four-term President Franklin D. Roosevelt the government has spread tax money around beyond its constitutional role and infiltrated state governments and private enterprise. Under current President Barack Obama and with the aid of a virulent unrestrained Democrat congress, government expansion has grown like an atomic mushroom cloud. By distributing tax payer money, often without being asked by recipients, the government has used this largesse as reason enough to dictate what those getting the money may or may not do. By the way, this includes the states as well.

Historically private enterprise has answered for the most part only to its owners, whether privately or publicly owned. However today we see and largely accept that if tax payer money finds its way into free enterprise in what should be a free market, the government which distributes the money can say how the business can be run, even to the point of dictating salaries and employee compensation.

There is much hysteria generated by government bureaucrats, the executive and legislative branches of government, supported by a sympathetic news media, who ask the question “how dare they pay executives (and others) huge salaries and bonuses when the government ‘bailed’ them out?” It seems that if money is given to a business, it has the right to become involved with how the business spends its money. There is virtually no publicly stated opposition to this idea even though the premise can be used to justify government intervention in almost all aspects of our lives – that the government has not as yet gone this far is only because those in charge have not thought of it, for now.

Let’s just see what could be done if we accept the idea that not only big business can be put under the government thumb but anything and anyone else that benefits from something the government does “for them.”

Money deposited in banks is insured by the FDIC, does this mean the government can tell the depositor how the insured money can be used?

Many students take out loans for their education. The government has recently decided that such loans must be given by the government and not privately owned banks (if there are any left). Can the government say what course of study the student borrower can have?

Home mortgages are often obtained directly or indirectly from the government or insured by government controlled agencies like Fannie Mae and Freddie Mac. Why can’t the government use this link to approve or disapprove a buyer’s purchase selection or what the home owner wants to do with the house?

Government money finds its way into schools by one means or another and actually has enabled the government to dictate curricula and what students may eat at the school and what food may be served in government sponsored school lunches. As a result we see all manner of propaganda imposed on school children from programs praising the president to aggrandizing homosexuality. Private home schooling is discouraged because it is free from government control.

The federal government gives money to states and can then dictate speed limits (remember the 55 mph national speed limit) and all manner of rules and regulations which absent government money would be under the control of elected state officials.

The authority of the federal government of the United States is limited by the Constitution, intentionally, to prevent the government from taking over freedom and liberty; at least that’s how it supposed to work. But as you see tax payer money can be used by the government to extend its reach well beyond what the Constitution intended.
Patrick Henry spoke for all of us who want a Constitutionally limited government:
"The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government -- lest it come to dominate our lives and interests."

During the less than two years Barack Obama has been president an enormous amount of money has been distributed to what had been publicly owned companies usually operated by company officers overseen by a board of directors on behalf of the owners, i.e. shareholders. This is how free enterprise works in a free market system but under the “hope and change” promised by Obama there is no boundary for the government.

Obama declared multiple crises and used the fear generated to invigorate dormant leftists members of congress to transform America into a socialist/Marxist society which has been their goal for years. The irony is that they did this with tax payer money for as long as it lasted and then with the printing presses in the Treasury Department under orders from the privately owned Federal Reserve Bank (some of whose owners are not Americans).

With the aid, if not direction, of the Federal Reserve Bank leadership, billions and billions of dollars were given to businesses and banks under the guise of helping them out to avoid private bankruptcy and the financial disruption that would cause - even to banks who did not want government help. In return for this infusion of tax payer money, the government received ownership interests in the businesses receiving the government “bailout” money. With virtually no opposition, or much knowledge of the public, the federal government wound up with 60% ownership of General Motors; 35% of GMAC; 35% of Citigroup and 10% of Chrysler. The Obama administration used the rubric of the peoples’ money given to businesses to dictate not only how the businesses and banks are to operate, but what compensation can be made to company employees. One of Obama’s “Czars” went so far as to require compensation reductions of as much as 90%.

Let’s ask those business leaders and unemployed who supported Obama’s election – how is that hope and change working out for you? Contributing Editor Vincent Gioia is a retired patent attorney living in Palm Desert, California. His blogs at and he may be contacted at

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