If you think I am spinning a fantastic yarn, just look at the numbers: According to estimates by political scientist Kenneth Thomas of the University of Missouri at St. Louis, U.S. cities and states give out an estimated $65 billion in subsidies each year. To put it another way, that’s enough to employ 1.3 million Americans at $50,000 in combined salary and benefits. Although these subsidies come in various forms—from tax credits to subsidized loans to free infrastructure—the ends are nearly always the same: a whopping 90% of all state and local development subsidies go to big businesses. This is cronyism and it’s happening in cities across the country under the Orwellian guise of economic development.

As the economists Christopher J. Coyne and Lotta Moberg have pointed out, taking from working families and small businesses and transferring it to big business is not only a waste of money—it’s actively making us poorer.

Let’s close out our Big Box Inc. example to understand why. You eventually secured the deal with the fancy representative and your city issues a few million in bonds to fund the road, water, and sewage upgrades. It’s scary, particularly given that your city is already in rough financial shape, but that’s okay because it will all pay off. A shiny new Big Box location opens in your city and everyone is happy. A few chain restaurants and shops come to town to fill out the new infrastructure and you now have a bona fide stroad. A multinational manufacturing company catches word that your town is “pro-business” and arranges to open a facility in your town in exchange for some free land and infrastructure upgrades. Looking at the books, it makes you a little uncomfortable, but that’s okay; everyone loves the giant new roads and shiny new development. Your town’s mayor is praised for “turning the town around” and is even elected to Congress.

The shine quickly starts to wear off. A few local businesses start to struggle since they cannot compete against companies that are exempted from taxes. Downtown is hit the hardest, since the giant new roads required your town to divert money from maintaining existing streets, sidewalks, and public spaces. You raise taxes to keep the schools open and lights on, but many of those businesses you subsidized—a few of whom are your largest employers—are exempt.