Subsidies distort prices

Subsidies are a major feature in our economy but they are a  problem as they distort prices and cause inefficiencies in the economy.

As price is one of the things we consider in making purchases a  price which reflects the true cost of the item helps us to make wise decisions which reflect the best use of resources according to our indivdual values.

When subsidies are given, the person(s) who hands out the subsidy gets to make decisions as to what is produced according to his/her values or according to which producers has been the best lobbier.

Another problem is that when prices are distorted those who are not receiving them are at a disadvantage and thus there is less competition.

Subsidies are frequently given to protect or create jobs. Rather than giving subsidies to producers they should be given to consumers. To be fair they should be available to everyone perhaps in the form of a guaranteed annual income.

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