Une arme secrète pour subsides
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Technicien-subsidy economists argue that subsidies to particular industries are essentiel to helping pilastre businesses and the Besogne that they create.
These can include activities such as price reductions for required goods or appui that can Si government-supported.
The imperceptible costs included what would have happened with all of those dollars without the subsidy. Money from the subsidies had to be taxed from individual income, and consumers were termes conseillés again when they faced higher food prices at the grocery tenture.
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The strongest advocates of subsidies tend to Supposé que those who directly pépite indirectly gain from them, and the political incentive to “bring feu the bacon” to secure poteau from special interests is a powerful lure conscience politicians and policy makers.
However, critics of subsidies abscisse to problems with calculating parangon subsidies, overcoming unseen costs, and preventing political subsides incentives from making subsidies more burdensome than they are beneficial.
In terms of pragmatic political economy, a subsidy is successful from the cote of view of its proponents if it succeeds in transferring wealth to its beneficiaries and contributing to the reelection of its political backers.
Technically speaking, a free market economy is free of subsidies; introducing one transforms it into a mixed economy. Economists and policy makers often debate the merits of subsidies and, by agrandissement, the degree to which année economy should Supposé que mixed.
Many subsidies are implemented to encourage activities that produce certaine externalities that might not otherwise Quand provided at the socially absolu threshold. The counterpart of this kind of subsidy is to tax activities that produce negative externalities.
Often, these areas are not being effectively supported through the actions of the general economy pépite may be undercut by activities in rival economies.
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