Who Pays Taxes

[retro-man]

My position on subsidies is that they create inefficiencies and distort markets, which always result in increased costs for consumers.

 

Case in point: subsidies for corn to boost ethanol production. The government pays farmers to grow corn for ethanol when they would have grown other crops -- say, soy or wheat -- more efficiently. This creates demand pressure on the remaining farmers who do produce the soy or wheat, which drives up prices for those commodities. It also creates demand pressure on the farmers who grow corn for human consumption, as well as for animal feed. So when you see a 24 oz. loaf of whole-grain bread costing upwards of $4.00, and a pound of hamburger at more than $3.00, you can directly attribute this to corn-for-ethanol subsidies. Trace the price of wheat correlating to legislation enacting corn-for-ethanol subsidies. It more than doubled. Also, I think it was in 2008, there were food riots in countries whose populations are heavily dependent on corn in their diets (in Mexico and in Egypt, as well as other countries), when corn prices had skyrocketed because of the ethanol subsidies. Those people were hurt -- not helped -- by our own government's meddling in our agriculture industry.

 

Even worse, I've read that ethanol produced from corn takes more energy to produce than it delivers (I concede that I'm not a chemical engineer, so I don't know this to be a fact). If this is true, then corn-for-ethanol subsidies is a truly egregious example of the government's propensity for incentivizing inefficiency and waste.

 

The point is: America's agricultural industry is very advanced, and one of our country's leading export sectors. It doesn't need the government incentivizing it to produce commodities it could otherwise produce more efficiently -- to better effect for all.

 

As for subsidies for Boeing, I'm a bit torn. Its chief competitor is Airbus, which, to my knowledge, is wholly subsidized by the European Union (someone correct me if I'm wrong). That creates something of a competitive disadvantage. On the other hand, most other countries' energy companies are nationalized, while ours are not. And Exxon-Mobil, et al, are doing just fine. So my free-market inclinations would say ditch the subsidies for Boeing.

 

Ditch it all, I say. No more "corporate welfare," and no more farm subsidies. That would cost a lot of lost K-Street lobbyist jobs, but it would translate to a better deal for us taxpayers and consumers.

 

Maybe we do have some common ground.

Yes, ethanol - God's gift to Archer Daniels Midland. It seems to me that EU subsidies to Airbus are the perfect justification for compensatory tariffs (not WTO action - I ain't no "one worlder" when it comes to our economy - do it all fairly but do it unilaterally). That way, we'd be directing revenues into government coffers, offsetting the tax burden to Americans, instead of directing the burden onto ordinary Joes and small businesses, to protect Boeing profits, which go straight to the pockets of a relatively few shareholders - there's your redistribution of wealth. The problem is, we're so damned sure that we don't want to go there, while not acknowledging that the way we're doing things now creates a tremendous injustice. I agree - do away with all subsidies.

[jpd80]

The UK politicians are making things happen by cutting their spending!

And also by increasing taxes, that and cutting spending are two

things I'm sure American voters would resist with a passion.

Edited December 23, 2010 by jpd80

[RangerM]

And also by increasing taxes......I'm sure American voters would resist with a passion.

 

So long as our government spends thousands-millions-billions of dollars to build trains/bridges to nowhere, study Asian prostitutes, and help fat people feel better about being fat, you can count me as one of those who resist.

Edited December 23, 2010 by RangerM