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Government Squanders Huge Sums on Telephone Entitlement Subsidies

Posted by Steve Markowitz on February 13, 2013

The Wall Street Journal reported on another government boondoggle related to entitlement handouts.  According to the report the federal government paid out $2.2 billion in 2012 to provide telephones to Americans.

raining moneyThe telephone subsidy program began in 1984, yes under the Republican administration of Ronald Reagan.  The idea behind the program was to allow poor people to communicate with their families and for emergency services.  The handout is subsidized by telephone companies adding an average of $2.50 per month to bills of landline and cellphone paying customers.  By 2008 the program’s cost grew to over $800 million, nearly tripling to over $2 billion four years later.

Typical of “do-gooder” programs invented by the government, many beneficiaries the telephone handouts are not those initially intended.  The Journal reported that over 40% of recipients have not proven their eligibility for the program.  In addition, this program is another example of crony capitalism offering huge benefits to cellphone providers including AT&T, Verizon, Sprint, Virgin mobile and TracFone.

As with many government programs of dubious benefit and with significant abuse, the government telephone handout program continues.  Even worse, big government supporters continue to come up with ideas to redistribute wealth to not only to less wealthy Americans, but also to big corporations and of course politicians.  President Obama is a strong advocate of growing such programs.


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