I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Joined: Jun 20, 2007 Posts: 549 Location: USS Poland
Posted: Mon Sep 01, 2008 7:37 am Post subject: Re: Are subsidies always bad?
TommyJefferson wrote:
Wrong.
Go learn economics.
There is more schools of economics not only Austrian school. _________________ The poor complain; they always do,
But that's just idle chatter.
Our system brings rewards to all,
At least to all who matter.
Posted: Mon Sep 01, 2008 9:47 pm Post subject: Re: Are subsidies always bad?
Dreamtwister wrote:
I like the milk example.
Let's pretend that the actual retail price of milk is $4.00. Pretty discouraging, isn't it?
Well since the government heavily subsidizes milk, grocery stores are able to put up a much more comfortable sticker price of $2.00. The price to the consumer appears cheaper, doesn't it? Well it's not, because the government had to cough up the extra $2 from it's own revenues, either directly from taxes, or indirectly through inflation.
But even worse, is that everybody chips in for that extra $2, even if they never drink any milk. Where's the "Didn't drink any milk this year" deduction on my tax form?
And finally, subsidies are anti-small business. Huge agribusinesses like ADM, Cargill and Monsanto are capable of operating on less profit-per-unit because they have scale. Joe the farmer can not. So Joe the farmer gets pushed out of business, which he then has to sell to...you guessed it...ADM, Cargill and Monsanto.
But the situation is even uglier than all that!
What if the government of Guadalawhothehellcares decides to subsidize it's farmers to the tune of $3? You know someone is eventually going to find a way to profit from loading that surplus milk onto a plane and flying it to markets half-way around the world. Don't laugh. At my neighborhood supermarket, I can buy tomatos from Spain for less than those grown locally.
Even education is a risky investment. When the population is well-educated, not only are they a threat to the government, they think of themselves as too good to swing a mop for minimum wage. Somebody has to shovel the crap, or society doesn't work.
Always amazing to see this kind of complete cluelessness on how so many goverment subsidies work from the viewpoint of the pseudo-"Free Market" propagandists.
The government in the USA DOES NOT subsidize milk prices to consumers, it subsidizes milk prices to DAIRY FARMERS. It does this by using TAXPAYER MONEY to BUY HUGE AMOUNTS OF MILK AND MILK PRODUCTS to prop the price up to what the dairy lobby has determined to be the profit level they would like. Further, the farm lobby rides the government hard to dispose of this milk in a way that will not cost them any sales in domestic and foreign markets by rich or poor alike. Much of these products are simply dumped and wasted, sometimes at sea. At one point, some was given away to the poor and elderly, but the farm lobby stopped it -it "cost them sales" of their inflated-price products!
Where's the "I am not a profitable owner of a subsidized huge farm corporation" rebate box on my tax form?
The author is correct in stating that "subsidies are anti-small business". Many of the subsidies go straight to the mega-businesses, who not only have economy of scale, but a good piece of 100 billion subsidy passed like clockwork by the Congress.
Indeed, "Somebody has to shovel the crap, or society big business doesn't work get its subsidies", but its the individual taxpayer who gets it in BOTH ends in this example. The tax money spent means the consumer pays DOUBLE for the inflated prices of the farm products.
Joined: Jun 20, 2007 Posts: 549 Location: USS Poland
Posted: Mon Sep 01, 2008 10:24 pm Post subject: Re: Are subsidies always bad?
TommyJefferson wrote:
The price discovery mechanism is the same regardless of school.
Correct, but it's neutral, nor good neither bad.
Quote:
Subsidy is not most efficient.
Poverty is not most efficient state of social condition.
The least poverty is in welfare states. _________________ The poor complain; they always do,
But that's just idle chatter.
Our system brings rewards to all,
At least to all who matter.
Joined: Feb 20, 2005 Posts: 2880 Location: Uppsala, Sweden
Posted: Tue Sep 02, 2008 9:04 am Post subject: Re: Are subsidies always bad?
Alcassin wrote:
TommyJefferson wrote:
The price discovery mechanism is the same regardless of school.
Correct, but it's neutral, nor good neither bad.
Quote:
Subsidy is not most efficient.
Poverty is not most efficient state of social condition.
The least poverty is in welfare states.
Which has nothing to do with the discussion here.
Subsidies and penalties can be used and are used to make the market work more efficiently. For example when someone is essentially profiting from stealing a little from everyone, like polluting the commons. Is this hard to understand? _________________ Peak oil is not an energy crisis. It is a liquid fuel crisis.
Joined: Aug 19, 2004 Posts: 1755 Location: Republic of Texas
Posted: Tue Sep 02, 2008 11:36 am Post subject: Re: Are subsidies always bad?
Alcassin wrote:
The least poverty is in welfare states.
Hahhaha.
Yeah, they have so little poverty in China, Cuba, North Korea, Venezuela, and Somolia compared to less socialistic countries.
Oh how I pine for the days when socialism wiped out poverty in Cambodia, the USSR, and Africa. Yes, those were blessed enclaves of intellectual happiness and full bellies. _________________ Conform . Consume . Obey .
Joined: Jun 20, 2007 Posts: 549 Location: USS Poland
Posted: Tue Sep 02, 2008 12:27 pm Post subject: Re: Are subsidies always bad?
Compare Sweden, Norway, Denmark, Iceland to any other country.
They are welfare states.
Oh yeah, you are always cherry-picking, standard tactic TJ.
I would put all libertarians in Haiti or Somalia.
Make your dreams come true _________________ The poor complain; they always do,
But that's just idle chatter.
Our system brings rewards to all,
At least to all who matter.
Joined: Aug 19, 2004 Posts: 1755 Location: Republic of Texas
Posted: Wed Sep 03, 2008 10:55 pm Post subject: Re: Are subsidies always bad?
Alcassin wrote:
Compare Sweden, Norway, Denmark, Iceland to any other country. They are welfare states.
Exactly.
Watch as them trend into crash as cultural diversity destroys them. The nonsense that is the unsustainable Scandinavian welfare model is like watching a car wreck in slow motion. Very sad. _________________ Conform . Consume . Obey .
Posted: Thu Sep 04, 2008 2:01 am Post subject: Re: Are subsidies always bad?
TommyJefferson wrote:
Alcassin wrote:
Compare Sweden, Norway, Denmark, Iceland to any other country. They are welfare states.
Exactly.
Watch as them trend into crash as cultural diversity destroys them. The nonsense that is the unsustainable Scandinavian welfare model is like watching a car wreck in slow motion. Very sad.
So......
You think they'll be in a worse state than the land of the free?
Interesting. _________________ Live, Love, Learn, Leave Legacy.....oh and have a Laugh while you're doing it!
Posted: Thu Sep 04, 2008 2:44 am Post subject: Re: Are subsidies always bad?
Alcassin wrote:
Compare Sweden, Norway, Denmark, Iceland to any other country.
They are welfare states.
Sweden is suppose to be the greatest example of how liberalism can work wonders if it's done right.
Basically it's the poster child of socialistic liberalism. Agreed?
Unfortunately I guess it's time for me to spoil the party.
You see Sweden still has many trappings of the horrors --> capitalism
Sweden home to 125 billionaires
125 billionaires is more than (France+Germany+Britain) combined.
Those damn socialists! _________________ joeltrout Oct-2008: Dow 13,000 in three years
Posted: Thu Sep 04, 2008 4:02 am Post subject: Re: Are subsidies always bad?
Which would seem to indicate a mixed economy works best in todays capitalist system.
cube wrote:
Alcassin wrote:
Compare Sweden, Norway, Denmark, Iceland to any other country.
They are welfare states.
Sweden is suppose to be the greatest example of how liberalism can work wonders if it's done right.
Basically it's the poster child of socialistic liberalism. Agreed?
Unfortunately I guess it's time for me to spoil the party.
You see Sweden still has many trappings of the horrors --> capitalism
Posted: Thu Sep 04, 2008 5:12 am Post subject: Re: Are subsidies always bad?
Quinny wrote:
Which would seem to indicate a mixed economy works best in todays capitalist system.
*cough*
I don't know if there's any "proof" of such a thing.
The only "proof" which exists, is that every country on this planet seems to have one foot firmly in place of capitalism while the other is on top of socialism. The only difference is that some countries lean more to one side then the other.
Roughly speaking there seems to be 3 types of economic systems practiced on this miserable planet. ALL systems are capitalistic but have government interference but for very different reasons.
ALL countries on this planet are capitalistic but NONE is free market.
1) American system - This is the closest thing to "TRUE aka Adam Smith" free market capitalism.
Whenever the government steps in, it justifies such action based on the "multiplier theory".
The belief that if gov. spends $1 on such a program it will generate $3 in economic benefits for society.
The space program, freeway interstate system, and gov. backing of home mortgages are good examples.
2) Asian system - For whatever damn reason the government will select a few lucky industries to become "national champions" and all sorts of subsidies will be lavished on such industries to make them grow.
Ship building in Asia is a good example.
South Korea is the poster child of this economic system.
3) European system - the closest thing to socialism.
France or Sweden are good examples.
There's a lot of gov. programs that are designed to blatantly take money from the rich or middle class and give it to the poor.
France has an infamous history of gov. intervention in the low income housing market.
If it was up to me I would prefer the "traditional" American economic system back in the days when George Washington and Thomas Jefferson was around.
That is what I would call "true" free market capitalism. No other nation has gotten closer to achieving that ideal then the USA. _________________ joeltrout Oct-2008: Dow 13,000 in three years
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