Okay, the CPI says 4.8%, your article says 4.5%. Thanks for the support? Are you sure you understand what I posted?
Not sure you can blame fuel prices for this one:
http://www.iht.com/articles/2008/04/23/opinion/edbowring.php
Gas Tax and Record Profits
- Thread starter IchabodPlain
- Start date
-
- Tags
- gas tax john mccain us economy
http://www.iht.com/articles/2008/04/23/opinion/edbowring.php
JEROME DA GNOME
Banned
- Joined
- Oct 7, 2007
- Messages
- 8,837
Ultimately it is the cause of too many dollars being placed into circulation. The oil price increase is just the initial symptom.
Ah, go back to the gold standard?
Actually, the price of oil was kept artificially low for quite some time through various treaties and agreements. This is a natural adjustment.
JEROME DA GNOME
Banned
- Joined
- Oct 7, 2007
- Messages
- 8,837
No, there is nothing inherently wrong with fiat currency as long as it is in a circulation amount comparable the the actual wealth of a nation. The current problem is that a much larger amount of dollars are being placed into the economy then is proportional to new wealth being created.
I agree that the price of oil has been low over the last 30 years excluding the last several.
Dan O.
Banned
- Joined
- Feb 14, 2007
- Messages
- 13,594
Too many dollars chasing too few goods is the formula for general inflation. The rice situation looks more like the work of individuals acting in their own short sighted self interest. Millers and exporters are reducing delivery in order to reap higher profits with expected higher prices. Consumers are attempting to increase their stock with the news of pending shortages. These actions are contributing to the immediate shortage in the marked.
ETA: The solution to the current rice problem would be for governments to immediately impose a tax on rice to bring the short term demand in line with supply and discourage hoarding.
ETA: The solution to the current rice problem would be for governments to immediately impose a tax on rice to bring the short term demand in line with supply and discourage hoarding.
Last edited:
Another problem is subsidies. They've been keeping the price of rice artificially low, which has been essentially putting this entire system under tension (the demand is increasing, the supply is reasonably constant (it's to the point where non-ideal farmland is being used for rice, we're near the max at the moment) so the price should go up. But subsidies keep the price constant. Hence a tension which is now being resolved.
davefoc
Philosopher
The purpose of most agricultural subsidies is to keep the price of food high in the countries where the subsidy is applied. The idea is to keep the market price of food high by either paying farmers not to grow thereby reducing supplies and driving up prices or to buy up excess production caused by government imposed above market prices.
They do have the effect at times of lowering the cost of food in third world countries because the western governments that engage in agricultural subsidy programs can end up with an oversupply of the subsidized commodity and they dump the overproduction on third world countries at subsidized rates with, at times, the benefit of reducing hunger, but always with the result of disrupting local agricultural production.
There is almost no justification other than pure politics in the western world for agricultural subsidies. They might have some benefit to the general population if they were used to increase crop diversity or to foster more sustainable farming practices. As implemented the principal benefit is to agribusiness and large landowners and as part of the method by which the Republicans win red state elections.
It would be interesting to see a study to determine how the average voter in a red state is affected by agricultural subsidies. There is obviously a significant trickle down effect as federal government largess finds its way into local businesses, but also the cost of food and taxes is raised on the red states to pay for those subsidies. So how does the average red stater make out with the overall unsound agricultural subsidy programs? I don't know, my guess is that they are a net loser and of course almost everybody in the non-red states is a loser including the poorest people in our society who have their food prices raised by the agricultural subsidy programs.
And layered on top of the agricultural subsidy programs is the wildly harmful and cynical ethanol from corn subsidy program. This is just a purely criminal enterprise being wrapped up in the patina of environmentalism.
Last edited:
Yes, because America is the only country to engage in subsidies. Most AMERICAN subsidies work the way you describe.
America = ~5% of the world's population. I love my country too, but don't overdo it.
davefoc
Philosopher
Your comment might have been meant in jest, but in addition to the US Western Europe engages in farm subsidies.
This was the first article turned up out of many in a google search using "europe farm subsidies":
http://www.iht.com/articles/2005/10/20/business/wto.php
Another major rice producer...
The way India (Population: about equal to the US and Europe) does it is they pay farmers to produce rice at a fixed price, keeping the price artificially low.
Last edited:
Periods of low or negative economic growth would tend to lower government revenue. Lowering tax raters would also be expected to lower government revenue. What we don't see is any evidence that lowering tax rates raises government revenue.