Name just one thing that America and the E.U could cut to start getting back on track financially

[NolSinkler]

Adinnieken said:

NolSinkler said:

Kasz216 said:
Farm subsidies.

Not only would it save us all kinds of money.

Food would become cheaper.

That's the stupidest thing I've read today.  Yes, it would save money.  No, food would become more expensive.  Have you studied economics at all??

Technically it just diverts the costs.  It diverts the cost from being an individual cost to be a common cost. 

Gas prices, for instance, increased because the farm subsidy for corn ethanol had been eliminated.  This was done in part because the fear/belief that it was diverting farming from food corn production to fuel corn production and it resulted directly in food price increases,and in part because Republicans wanted the increased use of ethanol, mandated by the Obama administration, to be as painful as possible and force the fed to alter the mandate as well as increase drilling permits for oil.

With the subsidy in place, fuel was cheaper, making life easier for everyone in terms of buying gasoline, but everyone paid a fraction bit more in taxes.  Eliminating the subsidy resulted in increased fuel prices, impacting the less fortunate of society more than the more affluent.  It did nothing for fuel prices, and because of the drought, prices will definitely increase next year. 

The problem with subsidies is that the age of the mom and pop farm is dying.  Corporate farms are the norm now and subsidizing corporate farms isn't really desirable.  The subsidies were intended to help mom and pop farms through tough times, as well as increase food production in the US. 

Subsidies lower the cost paid by consumers and increase the cost to society.  Overall, it can be shown that subsidies decrease the welfare of society as a whole.  A quick google search brought up exactly the graph I was looking for.

http://welkerswikinomics.com/blog/wp-content/uploads/2007/10/unit-4-international-economics_11.png