Subsidies Essay Example | Topics and Well Written Essays - 750 words

Subsidies - Essay Example Both direct and indirect payments can be part of an economic subsidy package. In the literature of economics, subsidies have been criticized for distortions and for wasting state or government resources. However, the criticisms from economics have not deterred states from providing subsidies. Some of the state or government policies may be responding to political expediency or convenience and this may be the reason why the criticisms from economics on subsidies have been failing to deter states and government from providing subsidies. Further, it is also possible that considerations other than economics have been determining state and government attitudes towards subsidies. For example, it is possible that national security can be invoked to defend a subsidy even if the literature of economics covers public goods in which issues of national security are included. Economic winners and losers in the new garbage facility. The economic winners in the subsidy include those in the supply chain of the new garbage facility. This means that the new garbage facility and their suppliers will benefit from the subsidy. Of course, the industry to which the new garbage facility will input into will also benefit from the subsidy. The economic losers in the subsidy can include the firms in the more developed part of the city. Although, the city government may not be likely exacting new payments from the said firms, it is possible that they can end up as economic losers just the same based on lost opportunities. However, they may not end up losers if the economic subsidy is just enough to compensate for the lack of profitability in the less developed area of the city. Citizens who will be living in the less developed city can be considered as winners in the subsidy because they will be able to avoid the possible discomfort without the subsidy. At the