Government taxes still remains

No! it is not out of place if government takes out of tax payer’s money to subsidize goods and commodities. The resultant analysis will still have it that the government in directly release the grant or the subsidies to the society in bits. This only happens when the subsidies liberates local industries into a competitive landscape with the global companies. With this demand will be reduced leading to a fall in price, and the shifting of equilibrium to the left. Subsidies given to manufacturers are only meant to improve the quality and quantity of produce.

The society still have a way of gaining back. More importantly when such companies become independently buoyant the grant is withdrawn but the payment of government taxes still remains. Considering the importance of technology in the global world of modern age, and secondly the requirement of investments to meet up the desired quality of products, it is of importance for a profit driven manufacturers to extend the means of financial incomes to interested shareholders (society).

It is hard to get a better cost efficient way of operation without strong financial capital base, since the return to the old fashion products is not competitive/or rather out-dated in this age of Information technology (IT). They could still make profit, but the huge risk will soon overwhelm the assets. Manufacturers with subsidies or grant some how have unfair advantage because of the immediate concentration of resources to boost production without agreement on profit sharing ratio.

I think this is unfair. Anyway, some industries get subsidies on request while some never border or goes straight into capital market to enter an agreement with investors. An inept business cannot stand the test of time irrespective of amount of subsidies disbursed. I think a wise government with expatriates should detect early enough of bad leadership in management before subsidy attempt. This would assist in checking the existence of unskilled business operators.

It is a strong controversial view point for discussion to relate the national benefits of subsidies to the national costs. For example, subsides benefit mostly the first-world countries leaving the developing and the underdeveloped countries a lean chance of survival. Bearing in mind that most of this affected less privileged countries are mostly populated, this leaves the larger percentage of the human economic resource handicapped.

Further development is henceforth hindere d. Austrian economists and other free-marketers submit that subsidies do more harm than good by faint economic signals.

References Callaway, D. S. and A. Hastings. 2002. Consumer movement through differentially subsidized habitats creates a spatial food web with unexpected results. Ecology Letters 5: 329-332