Subsidies and the deficit

We are facing deficits that can and will cripple our nation if not addressed. Perhaps our new Congress should look at cutting subsidies as part of our efforts to reduce our spending and thus our deficit. As of January, there are now more than 2,000 federal subsidies. Many, if not most, are imprudent or even absurd in today's world. In May, we provided a subsidy of over $140 million to Brazilian cotton farmers.  

The government subsidizes products that cannot survive on their own, such as ethanol, bio fuels and wind farms, to name a few. When these products are ready for prime time on their own, they will supplant other fuels via the free market, but now, without subsidies, these technologies are prohibitively expensive. Hiding their true costs in subsidies is dishonest, in that we all pay for it in increased government spending, more taxation and higher deficits.

 

It is one thing to support research, but it is quite another to subsidize the production and deployment of items that are not yet economically feasible. During the space race, President Kennedy encouraged the private sector to develop the technology to get us to the moon, and they did. Isn't it time again to let the public market be free to determine what best works and what is feasible, because it is the public who will ultimately be the buyers?

It is entirely possible that government subsidies of certain products may have discouraged the private sector from pursuing what otherwise might have been viable alternatives, because of the artificial competition created by government subsides. Fair competition brings down prices and weeds out products that are not viable. This is the beauty of the free market.

 

We need to analyze all subsidies and eliminate those that are wasteful or simply plain dumb in this economic climate. We can no longer afford to continue subsidizing Brazilian cotton farmers, paying landowners of land in the middle of New York City not to grow crops, continue subsidizing home loans to those who have little or no chance of repayment, etc.

 


We are facing deficits that can and will cripple our nation if not addressed. Perhaps our new Congress should look at cutting subsidies as part of our efforts to reduce our spending and thus our deficit. As of January, there are now more than 2,000 federal subsidies. Many, if not most, are imprudent or even absurd in today's world. In May, we provided a subsidy of over $140 million to Brazilian cotton farmers.

 

The government subsidizes products that cannot survive on their own, such as ethanol, bio fuels and wind farms, to name a few. When these products are ready for prime time on their own, they will supplant other fuels via the free market, but now, without subsidies, these technologies are prohibitively expensive. Hiding their true costs in subsidies is dishonest, in that we all pay for it in increased government spending, more taxation and higher deficits.

 

It is one thing to support research, but it is quite another to subsidize the production and deployment of items that are not yet economically feasible. During the space race, President Kennedy encouraged the private sector to develop the technology to get us to the moon, and they did. Isn't it time again to let the public market be free to determine what best works and what is feasible, because it is the public who will ultimately be the buyers?

It is entirely possible that government subsidies of certain products may have discouraged the private sector from pursuing what otherwise might have been viable alternatives, because of the artificial competition created by government subsides. Fair competition brings down prices and weeds out products that are not viable. This is the beauty of the free market.

 

We need to analyze all subsidies and eliminate those that are wasteful or simply plain dumb in this economic climate. We can no longer afford to continue subsidizing Brazilian cotton farmers, paying landowners of land in the middle of New York City not to grow crops, continue subsidizing home loans to those who have little or no chance of repayment, etc.

 


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