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 [s]society[/s] big business doesn't [s]work[/s] 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.
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Posted: Sun 31 Aug 2008, 14:02:46
