The Mind-Blowing Stupidity Behind The $280 Billion ‘Chips For America Act’

Authored by Rob Smith via RealClearMarkets.com, Monday, August 1, 2022

Excerpts:

Congress and H.R.7178, the Chips For America Act.

Has the Congressional Budget Office ever been even close to right in its projections? Was Anthony Fauci right about anything? Have you ever read the Congressional Record concerning the 1935 Social Security Act? How about the trillion dollars spent in the Middle East to turn barbaric tribesmen into Jeffersonian idealists via nation building?  The formation of the Department of Education in 1979 sure turned out well. $68 billion/year is being spent and our nation’s youth can’t find the United States on a map of the world…

It works like this. The government ignores the fact that individuals can look out for themselves and that markets work. Thus, it enacts legislation to fix a perceived problem, but the legislation does not fix the problem. It creates much bigger problems (see the American health care system). Then to fix the much bigger problem that it created, it enacts more legislation and [on and on]..

All of this is on full display with Congress about to pass H.R.7178, the Chips For America Act. ….

The reason there were no chip supply line shortages pre-fake-pandemic is because millions of “invisible hands” from all over the world provided the needs for a world-wide market. It’s the miracle of markets, and each year the government did not intervene “by trying to help the chip market,” the better the chips and the cheaper the chips became per unit of processing power….

Now what’s going to happen now that the U.S. government has stuck its nose into the semi-conductor market. Remember when the United States had restrictive tariffs and limits on foreign cars. Everything made in Detroit was a pile of junk; think “Plymouth Duster.” Once Detroit had to compete with Japan and Germany, American cars got a whole lot better and much cheaper as better cars produced 2 to 3 times more usable miles and lasted longer.

So what’s to become of the price and quality of semi-conductor chips? This bill carries a $280 billion cost.  Doesn’t this crowd out private investment?  Isn’t it better to leave money in the private sector such that overall investment can flow to its most productive use? What are the potential pitfalls and unintended consequences of this legislation? When has a government industrial policy, picking winners and losers ever worked? Why can’t Congress simply get out of the way, reduce its regulatory burden on business and let the market solve the chip shortage? By the time this Leviathan Legislation begins to bear any fruit, won’t market forces have already fixed the chip shortage?

The opening paragraph of the “Chips Act” states that it “establishes investments and incentives to support U.S. semiconductor manufacturing, research and development, and supply chain security.” Government investment in preferred industries! Yeah, that worked real well with Solyndra, the Synthetic Fuels Corporation, the Clinch River Breeder Reactor and I could go on…

…This isn’t private sector research and development, this is government research and development, which means politicization to control the thoughts and actions of the chosen recipients. These recipients don’t have any skin in the game as they do not own the chip companies…

$80 billion is going to the National Research Foundation, the sister entity of the National Institute of Health. You know, the same think tank of brilliant scientists that told us the vaccines worked and wouldn’t kill people! The same government experts who created the chip shortage via its advice to ruin the world economy.  This bill is completely unnecessary, the chip shortage problem will solve itself. $280 billion will flow towards a protected class of government sycophants in a “scratch my back I’ll scratch your back” corrupt system of political patronage.

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