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Written by David M. Voth   
Wednesday, 26 August 2009 11:57
 Government Subsidized

By David M. Voth | August 25, 2009

 

Time and time again we see news articles of the government subsidizing or “funding” projects. The stupidity of this is so obvious for a free minded individual. Consider a few things. First, there is no such thing as government money. The money that government uses (wastes) is money forcefully expropriated from the people. Government does not create or produce anything; therefore, it does not make any of its own money, save the printing of it. All government money is forcibly obtained from people.

 

Second, one needs to ask why is the government subsidizing the project in the first place. If it were a viable project the free market would “fund” it. Therefore, we must always ask, when we see one of these stories, what’s wrong with the project? How come it needs some of “our” money to continue?

 

I read a news article recently that brought me to write this article. The title of the article was: Natural Resources Canada: Government of Canada Invests in Manitoba Biofuels. Read carefully: “Government of Canada Invests.” There’s misinformation right in the title. As I wrote, the government has no money of its own, so it can’t “invest.” Wouldn’t it be illegal for you to steal money from your neighbor to “invest” in a project? How then can it be different for government?

 

Just because something is the established norm doesn’t make it right. “When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” –Frederic Bastiat

 

I read more of the news article because I was curious. The first sentence of the news article says, “Husky Energy’s Minnedosa plant will receive up to $72.8 million to support the production of ethanol, thanks to an investment by the Government of Canada.” The truth is that it’s an “investment” they will likely never see a return on. I’m sure they don’t even expect to see a return. Therefore, it’s not really an investment. Every time you invest your money you expect a reasonable return on your investment, don’t you? Let’s be honest here. This is just another government give away of your money. It’s time to stand up to these idiots and demand fiscal responsibility.

 

Let’s consider the viability of this so-called investment. Although biofuels have become politically correct, they are not the right way to reduce carbon emissions and/or oil consumption, provided that these objectives are necessary anyway. When farmers grow crops for fuel it increases our cost of food and these biofuels represent such a small percentage of our total fuel supply anyway. A report from the Organisation for Economic Co-operation and Development (OECD), says that biofuels will only account for 13 percent of liquid fuels by 2050.

 

But here’s the really big kicker, while our dishonest politicians extol the virtues of ethanol they fail to tell you the truth about why it needs to be subsidized. The government forces oil companies to use ethanol in our fuel and then they subsidize it, why? The number one reason is that using ethanol is not cost effective. It takes about as much energy to produce ethanol as is generated when it is burned.

 

It takes a lot of gasoline, diesel, and natural gas to run the tractors, farm implements, grain dryers, trucks, and processing plants. Furthermore, ethanol can’t be moved in pipelines, because it deteriorates. Therefore, it must be trucked, again costing more in fuel and pollution. The true fact is that the net energy production from corn is basically ZERO!

 

And now the incompetent Canadian government throws away another $72.8 million dollars of your money on another bad project that could not survive without political help. First they steal your money (taxation) then they “fund” a looser project. Don’t celebrate this, but instead challenge it for the stupidity that is.

 

I believe that there is no rational alternative to free markets, limited government, and individual liberty. “The common man is the sovereign consumer whose buying or abstention from buying ultimately determines what should be produced and in what quantity and quality.” –Ludwig von Mises

 
 

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