When the United States Congress adjourned on Friday, December 23, 2011, it allowed ethanol subsidies to expire at year end after thirty-three expensive years for taxpayers and consumers. Estimates of the program's direct cost over that time exceed $45 billion. But don't rejoice just yet. Allowing the subsidies to expire only allows members of Congress to gain some points with ethanol critics and to avoid the embarrassment of defending the indefensible without really penalizing an industry which has been very generous to incumbents. Since the inception of the program in 1978, ethanol subsidies have ranged between forty and sixty cents per gallon. Recently the subsidy was set at forty-five cents. Tariffs on imported ethanol have also protected a domestic industry whose renewable product cannot compete in open energy markets without government support. Ethanol is a product which diverts food for fuel, raising the prices of both while degrading rather than improving the...(Read Full Post)