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?

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Originally posted by bas Dual exhaust tips on dual exhaust = QUAD EXHAUST = 300 gain in horsepower. Duh

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Originally posted by bas Undies with a dickhole aren't good for guys. Your balls can get caught in them. That's why I prefer to go over the gate instead of through the fence.

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 Halcyon+On+On OOKA-OOKA ME NACHOS ME PRESS KEYS ON COMPUTER GOOD

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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 bas Dual exhaust tips on dual exhaust = QUAD EXHAUST = 300 gain in horsepower. Duh

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Originally posted by bas Undies with a dickhole aren't good for guys. Your balls can get caught in them. That's why I prefer to go over the gate instead of through the fence.

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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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Paul

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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!

Last edited by DOOMBOT on May-18-2009 at 22:24

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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