Thursday, July 24, 2008

The high cost of low price

Today I had one more of the know-all socialist with a conscience types trying to convince me that government subsidies are good and the fact government is or trying to shield the consumers from rising oil and commodities prices is infact good. Hmm...I can understand where he is coming from, all through our lives we have been educated that government is good and it can solve all our problems. All we need to do is look to the government and abra ka dabra all our problems vanish. If only it were that simple.

What people fail to understand is the cost of subsidizing oil is the unending power cuts faced by households all over the country, non stop traffic jams faced by motorists, overcrowded public transport systems, reduced spending on research and development of newer and cleaner technologies. Because the money spent in subsidizing oil would otherwise have been spent on power plants, roads, public transport and research.

While protecting the poorest of the poor from price volatility in the short term is a good idea, in the long run subsidies do more harm than good. If an educated white collar worker in a city does not get this trade off how will the aam admi get it, the biggest challenge before the political class and media is how to communicate this trade off to the people?


Blogger helicaltwang said...

Change your name atleast now, dude
Madshuks can't catch you now :P

11:40 pm  
Blogger JC said...


8:08 am  

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