Earmarks, which refer to spending targeted by lawmakers to specific projects as opposed to whole departments or certain purposes, are mostly tools used by politicians for political gain. Through earmarks, lawmakers enrich their cronies and donors, buy loyalty, ensure their own future wealth, and consolidate power.Earmark defenders say the benefits of earmarks are worth the cost of the corruption, but that ignores the fact that the benefits of the earmarks, on net, go entirely to the insiders.
That is, when the government funds certain projects with earmarks, it crowds out charitable spending and private sector investment. In that case, the government spending was much larger than the charitable money it was crowding out. The crowd-out effect looks much worse when you consider private sector spending.
That is, earmarking is a matter of slushing money around the well-connected circles of insiders and ripping off the home district.