Last week, the Trump Administration announced more than $2 billion in new federal money for battery and critical minerals companies. The largest piece was a $1.4 billion loan to the silicon-anode battery maker Sila Nanotechnologies, alongside smaller deals for a scandium mine, a rare-earth-free magnet maker, a direct government ownership stake in a bauxite company, and grants for mining schools. It is the latest in a long series of federal investments; by the administration’s own count, it has signed or approved minerals deals worth nearly $40 billion since taking office.

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These actions rest on a genuinely bipartisan worry over the concentration of supply chains for minerals crucial to modern energy, computing, and defense technologies. Globalization and the pursuit of economic efficiency drove specialization, which has concentrated many supply chains. Mining and refining face an elevated risk of disruption because new capacity takes years or decades to build and markets are therefore slow to adapt. The concern is further heightened by the fact that several chokepoints are in countries prone to instability or hostile to the U.S. China, in particular, which dominates the mining and processing of many key minerals, has recently restricted exports in response to U.S. trade controls and sanctions on Chinese firms.

The risks posed by this concentration are worth taking seriously. The problem is that these tools may force taxpayers to take on unnecessary risk—leaving them stuck with the bill if the companies fail—without addressing the underlying problem. And more broadly, it is not clear that these investments, or the further government actions proposed, are being properly weighed against the true threat posed by supply-chain concentration.

Equity stakes and loans may seem better than direct subsidies because, in theory, loans are repaid, and government ownership means taxpayers share in the gains if a company succeeds. In practice, these mechanisms socialize the risk, often in exactly the cases where private investors judged the returns not worth it. And the firms that declined to finance these ventures had incentives that were aligned with getting the answer right. Government officials do not, and their real objective is more than likely political gain, such as jobs in certain districts, handouts to connected firms, or the appearance of action on a salient issue, rather than a good return on their investment. At worst, politically motivated deals open the door to corruption, or at least its perception.

Government has no special talent for picking winners, and strong reasons to pick worse than investors who are putting their own money on the line. And once the government is an investor or owner, it also has a political incentive to prop up failing firms rather than cut its losses.

A potential rejoinder is that government needs to “de-risk” certain investments to correct a market failure. In this case, the markets are underweighting the danger of relying on a single hostile supplier. The argument is that if returns are too low for private capital to bear the risk, then private financing won’t exist, and the government can step in to shoulder some of the risk and unlock the social benefits of supply chain resilience. But this assumes government can identify the true value of supply-chain reliability better than private firms can, and there is no reason to think it can. It is also plausible that markets are actually overvaluing resilience, in which case government efforts to subsidize diversification would themselves be economically inefficient.

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Even granting a role for government, singling out individual companies is the wrong policy tool. It rewards firms with the best lobbyists rather than the best prospects, leaving the underlying systemic problems untouched. A broader tool, such as a price floor or an across-the-board production subsidy, would at least allow the strongest producers to rise on their merits rather than concentrating government support on a small number of firms and undermining competition. But it would also be far more expensive and far more distorting.

All of this should be measured against the thing it’s meant to prevent: the cost of an actual disruption. That cost is hard to pin down, but the government’s own estimates are telling. By the U.S. Geological Survey’s accounting, even the highest-risk minerals, such as samarium, with a probability-weighted damage of $4.5 billion, would cause damage that is small relative to a roughly $30 trillion economy.

That is real harm, and there are additional national security questions that are difficult to put in economic terms. But before blindly jumping into government investments and broad policy tools that will raise consumer costs and put taxpayers on the hook, there should be a serious accounting of whether these programs are worth the cost. In the meantime, policymakers should avoid interventions that entail significant risks and high costs in favor of removing existing constraints, such as trade barriers, permitting requirements, and other regulatory obstacles.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.