Just who has the moral upper hand in the debate over government loans and subsidies? Surprise! It's the radicals for capitalism. People protest that there must be such government loans because people need them. I will show that if these programs are worthwhile, there is no need for the government to fund them. Further, recipients of government funds do not live as humans, but as parasites.
Governments procure funds through taxation. Taxation is crime, regardless of how many people vote for it, how the money is spent, and whether the victims receive compensation. How? A criminal asks for his victim's property. Without the victim's consent, the criminal will procure the goods by initiating force on the victim. Big time criminals, mobsters, demand protection money from their "customers." If the customers pay, they get protection; if they don't, the mob will initiate force on them.
Look at taxation. If I refuse to pay taxes, the government will initiate force on me (put me in prison), and take my money. It will leave me alone if I pay taxes (read "protection money"). Hence, a tax form is just a ransom note with good type-setting. The government has a legal monopoly on organized crime.
Criminals force people act according to their values. They impose their values on others. If, at the point of a gun, I try to pursue my highest values, the criminal will initiate force on me. If I refuse to pay my taxes, the government will initiate force on me. In this sense, the government is the criminal.
Notice above that the party (government) with the gun set the terms of the relationship. The party with the gun also initiates force. In the free market, people sign contracts to the exchange of goods and services. The terms of the relationship are agreed upon by both parties.
There is a difference between economic power and political power. The government uses political power. It has a monopoly on the legal use of initiating physical force. In this country, it is illegal not to pay taxes. These taxes support education, science research, and corporate welfare, and to the poor. Hence, if someone chooses not to contribute to what bureaucrats deem worthy, the bureaucrats initiate force upon him. I find it rather odd that abstaining from certain actions is illegal. I though laws were made to protect people's rights, which are violated through someone's action of initiating force upon another. Political power is achieved through the use of force.
To quote Ayn Rand:
"In a free economy...economic power can be achieved only by voluntary means: by the voluntary choice and agreement of all those who participate in the process of production and trade....economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman's tool is values; the bureaucrat's tool is fear."
If most recipients of government funded programs become productive and valuable to others, why don't more choose to invest in them or donate money? First, the government's legal extortion monopoly gives it an unfair advantage in the market of loans. It does not even have to charge interest to remain functioning, as it can always tax more. How many risky investments can a taxpayer choose to make when for every one dollar she loses she loses 100 cents, but for every dollar she earns, she keeps 42 cents? The 58 cents in taxes supports her competitor: government loan programs. The investments people do not make because of the income tax include funding basic science research and children's education.
In the free society, people receive loans or charity according to their virtues, not their need. To receive help, people first have to not only be good, but succeed in proving their worth to others. Anyone's demand that the government fund them is the demand to impose their notion of good upon others through force (taxation). Government involvement in the economy turns the invisible hand into an invisible fist.
Economist Henry Hazlitt elaborates: "When the government makes loans or subsidies to business, what it does is tax successful private business in order to support unsuccessful private business....The thing so great that "private capital could not have built it" has in fact been built by private capital - the capital that was expropriated in taxes."
Rational people not look to how the government can force people to help them. They look to themselves and to voluntary cooperation of others for their flourishing. The government's unfair advantage of legal coercion makes difficult such rational voluntary cooperation. All recipients of government funds live as parasites in this respect, as the funds are forced from tax paying hosts.
But we are human beings, i.e., rational animals. To live as humans, we need to freedom (from coercion imposed by others) to use our rational faculty, our minds, to pursue values. I am not advocating moral relativism. All individuals have the right do wrong. They do not have the right to force others to act according to their beliefs. Such force is a violation of another's rights. No action is moral if it is coerced. A moral action implies that the actor chose it. I can come to conclusions about morality. One of this is that even if someone is doing something wrong, it is immoral for anyone to force this person to do what they think is right. It is immoral to impose, through physical force or the threat of it, one's values upon another. Free minds entail free markets.