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Politics : Formerly About Advanced Micro Devices
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To: Road Walker who wrote (349439)9/27/2007 10:04:59 PM
From: TimF  Read Replies (1) of 1575764
 
re: Subsidies are different than price controls.

Not really. The effect is usually the same.

Subsidies can cause over production. But the taxes more than compensate for the subsidies. Also overproduction doesn't exactly seem to be a problem with oil or with gasoline or other oil products.

Price controls can have no effect, or very little effect if the allowed price range includes all the prices the good would be selling for anyway, but once the price controls leave that range they can be particularly devastating. A price floor for oil would have some similarities to a subsidy for oil, even if there are also important differences. A price ceiling would have be completely different, and if harsh enough could destroy the legal market for oil.

Depends on how you define "subsides". In addition to all their huge tax breaks and sweetheart oil leases, I call the Iraq war an oil subsidy.

I wouldn't. In fact I'd go so far as to say it isn't very reasonable to count it that way, at least not all of it.
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