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Thread: Government Subsidies, Pro and Con.

  1. #1 Government Subsidies, Pro and Con. 
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    Under what conditions are government subsidies helpful? Harmful? Why?

    Possible examples: transcontinental railway, interstate highways, dams, bridges, utilities, and aerospace/defense, though more are of course welcome.


    The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding go out to meet it.- Thucydides
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    When the costs are comparatively small but internalized or localized, and the benefits much larger but externalized or generalized, the only way to get those large benefits is to have some community agency - that can accumulate or at least register the benefits - bear the costs.

    That is, government properly steps in where markets don't work. Public health and information, roads and utilities, military operations, childhood education, and landscape protection (forests, watersheds and waterways and aquifers, overall soil fertility, etc) are obvious candidates.


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    Blue skies scientific research.
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    Quote Originally Posted by iceaura View Post
    When the costs are comparatively small but internalized or localized, and the benefits much larger but externalized or generalized, the only way to get those large benefits is to have some community agency - that can accumulate or at least register the benefits - bear the costs.

    That is, government properly steps in where markets don't work. Public health and information, roads and utilities, military operations, childhood education, and landscape protection (forests, watersheds and waterways and aquifers, overall soil fertility, etc) are obvious candidates.
    Why childhood education and not adult? Why only benefits externalized or generalized? Markets not work, this is HERESY!!!
    The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding go out to meet it.- Thucydides
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    Quote Originally Posted by skeptic View Post
    Blue skies scientific research.
    It would appear that without education, there would be few to conduct such research, agreed?
    Blue skies research - Wikipedia, the free encyclopedia
    The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding go out to meet it.- Thucydides
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  7. #6  
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    I think subsidies are useful for making basic food (eg: grain/rice/milk). It will reduce food price and thus benefiting the ruling party & the people themselves (it prevent riot). The article here says that riot is linked to food price: Researchers Identify Food Price Tipping Point Linked To Rioting : TreeHugger

    If food is subsidized then this mean food price will probably be regulated too . Else (if not regulated) a union of manufactures could use subsidy as extra profit rather than using it to deduct the original price.

    The bad is that this don't stimulate growth... Regulated manufacturers won't be able to have large gain in capital and thus can't invest on big things.
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