Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next
Author: rmhj Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 439191  
Subject: Re: big oil subsidies Date: 2/23/2013 3:53 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
AM: Why should the government subsidize ANY business?

Just asking here. Not saying they shouldn't. Just asking why they should. And IF they should, which businesses should they (meaning WE) subsidize?


Traditionally, there are several reasons to subsidize:

(1) To guaranteee a minimum supply of some staple. E.g., farms are subsidized for several reasons: (1) a surplus costs far less to the country than a food shortage; (2) it helps guarantee moneys to the rural/poor parts of the country, thereby helping the economy; (3) it helps to avoid large swings in food/foodstuff/commodity prices, which helps all the rest of the economy.

(2) To guarantee some supply or protect it against the vagaries of foreign supplies. E.g., the government maintains supplies of helium, oil, and other products that it considers important for defense purposes. (It used to maintain supplies of rare earth elements, too, but stopped. Now China is the only major supplier, and have decided to reserve most of their production for domestic customers.)

(3) To provide a shared commodity that benefits all above and beyond its cost. E.g., public roads, public schools, the creation of housing standards, automobile standards, drinking water standards, &c. By guaranteeing availability of these resources to the public, the public gains by their use more than their cost. This particularly applies when the costs and benefits of the shared commodity may be difficult to assess or charge directly.

rj
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement