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Subsidies

Do you think subsidies are beneficial to the general public, or do you see them as detrimental to your own society, and the world on a larger scale?

I am against subsidies, as they generally are anti-competitive. They create, in the case of corn in the US for example, an artificially low price that the world stage cannot compete on.

Discuss!

a controversial issue if you are referring to tax subsidies, where the tax payer's money goes to a specific group or sector (e.g: agriculture). In theory, this form of protectionism raises the bar for other competitors thus maintaining the quality of the product high which in effect benefits the customer. The problem with protectionism lies in the scarce variety of a product after the competition has decided to give up on your market and move to a more profitable one

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Originally posted by winston The problem with protectionism lies in the scarce variety of a product after the competition has decided to give up on your market and move to a more profitable one

This is already happening. Automobiles? Mobile phones? Agricultural products?

Agricultural product subsidies in the U.S. are a pain in the ass for farms in other countries who dont get them.

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Originally posted by gehzumteufel This is already happening. Automobiles? Mobile phones? Agricultural products?

Subsidies distort the market in a negative way.

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Originally posted by nchs09 Agricultural product subsidies in the U.S. are a pain in the ass for farms in other countries who dont get them.

This was one of the areas I was specific about with my corn example, but I was being more broad. Attempting to get other possibilities and examples.

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Originally posted by Krypton Subsidies distort the market in a negative way.

lipstick?

Do not like. Corn is the worst. Look at the price of corn syrup vs sugar in other countries... It doesn't even make sense.

Cheese in France and Switzerland is heavily subsidized and the governments are at the mercy of pretty militant farm groups / unions.

I agree that they are anti-competitive and protectionist, though I'm sure there could be some legit exceptions like in the case of R&D and new technologies getting government support to develop (ie: wind or solar power in North America). In this example, it's not something that you can immediately export and undercut the other guy, though there is still the protectionist sentiment regarding the potentially unfair playing field for foreign suppliers to supply a similar and effective product.

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In economics, a subsidy (also known as a subvention) is a form of financial assistance paid to a business or economic sector. A subsidy can be used to support businesses that might otherwise fail, or to encourage activities that would otherwise not take place.

By this definition alone, I'm not so sure how anyone would be able to say, logically, that subsidies are beneficial to the public. If something is not in demand by the public, but is supported by the state anyway, most likely due to political interest, the state is the one who would be supposedly benefiting, not the private citizen. Subsidies generally stunt real economic growth.

Here is one definition by dictionary.com

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3. a grant or contribution of money.

I see nothing wrong with this, so long as it is coming from a private citizen/company or without force (taxes). If I have enough capital, as a private citizen/company, lets say, to invest in a company in which I think has a good idea but not enough capital itself to start up, I should be allowed to do that. But, if this company is not meeting consumer demand, I can continue giving or investing my own capital into the company if I like, but should not be allowed or able to force others to do the same. If I did or was able to, I would essentially be stealing capital away from someone or something to prop up a company or product that wasn't really in demand by the consumer.

This is why we have booms/busts!

It depends completely on the context you're talking. Substidies for research for instance I think are a very good idea.

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Originally posted by pkcRAISTLIN It depends completely on the context you're talking. Substidies for research for instance I think are a very good idea.

In the form of grants, yes. I am referring to subsidizing costs, for example, the US corn industry.

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Originally posted by ******** Profiting individuals through subsidy though is a form of embezelment, so I think one must be careful to support the activity but not the individual financially. While making money off private enterprise is one thing, being paid by the government large sums of cash for doing nothing, is questionable practice.

Sorry, but aren't you living off a government subsidy even today? Haven't you been living off a government subsidies without working for several years now? Based on this discussion you are clearly capable of thinking/working for yourself.

quote:

Originally posted by gehzumteufel In the form of grants, yes. I am referring to subsidizing costs, for example, the US corn industry.

I think for a supposed champion of free markets and free trade the US is horribly hypocritical, especially in its relations with australia and our agricultural exports. Having said that, if I can buy US corn cheaper than I can get it from australian farmers, then it doesn't bother me so much. For me, capitalism is all about the consumer.

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Originally posted by pkcRAISTLIN I think for a supposed champion of free markets and free trade the US is horribly hypocritical, especially in its relations with australia and our agricultural exports. Having said that, if I can buy US corn cheaper than I can get it from australian farmers, then it doesn't bother me so much. For me, capitalism is all about the consumer.

Most US politicians and heck, even citizens, will probably say we are a free market society but anyone who has studied our economic policies a little should be able to realize that this simply is not true. It's unfortunate, especially when you sometimes hear or see people put the blame of our current economic troubles on capitalism and free markets!

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Originally posted by DOOMBOT Most US politicians and heck, even citizens, will probably say we are a free market society but anyone who has studied our economic policies a little should be able to realize that this simply is not true. It's unfortunate, especially when you sometimes hear or see people put the blame of our current economic troubles on capitalism and free markets!

Yeah, I think its BS when we engage with the states in "free trade agreements" and the US ignores our requests to reduce subsidies so aussie farmers can break into the US market. Fvckers.

We don't want your kangaroo food anyways. Unless it's from the Outback Steakhouse...

wtf ashley wtf...

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Originally posted by ******** Is something I said NOT true?

nobody reads your long-winded garbage posts man.

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Originally posted by ******** Hopefully you get my drift.

nobody ever gets your drift.

lol, PKC got it..

How about prescription medicines? There's a subsidy which does wonders for countless people in the world.

quote:

Originally posted by pkcRAISTLIN Yeah, I think its BS when we engage with the states in "free trade agreements" and the US ignores our requests to reduce subsidies so aussie farmers can break into the US market. Fvckers.

This was one of the other aspects of these subsidies that I had in mind. NAFTA is total fail imho.

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Originally posted by Fledz How about prescription medicines? There's a subsidy which does wonders for countless people in the world.

The subsidy isn't paid to the drug manufacturers. It is paid to the drug stores. At least in the US it is. I would assume it is the same elsewhere. I am not totally supportive of this, but I understand that at some levels it is necessary to allow access that would otherwise be denied.

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