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Kasz216 on 01 January 2013
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Mr Khan said:
Kasz216 said:
famousringo said:
Kasz216 said:

 

@outlawauron

 


Oh this isn't farm subsidies ending anyway, what the one guy above said is right, I looked it up, and basically what happened is right after WW2 a law passed setting the price of milk.

Essentially Milk isn't sold like a regular product, it's essentially sold "Communist" style.   The government buys the milk from the producers then sells it to the market... pricefixing what milk can be sold for.

The Farm bills have temporary measures in them that make the price they pay cheaper then what the 1949 law says we should pay, which had inflation adjustments in it.

So really the government would just be way overpaying farmers for milk, then way overcharging supermarkets, who would be forced to pay because well... all milk is sold through the state.

 

Essentially it's a case of

A) The government being too stupid to repeal laws and instead layer dumb laws on top of other dumb laws.

B) More or less a perfect arguement for why the free market system works way better then state run goverment price controls.

Well, when price controls are there to set a fair rate and not just give a huge handout to the farm lobby while screwing everyone else over. The idea of price controls is to stop things from getting too expensive, not to keep things very expensive


You'd think that, but actually price controls tend to make things worse... espiecally on the poor.   Price controls are implemented this generally happens in a supply low area.  

So say we put price controls on power generators in florida right after a storm, with the government making up the rest in subsidies or price control supports.   What you do is, you greatly increase the demand, and make the shortage worse and more and more people want it.   This drives up it's "true" value, and drives up it's "Black market" value even more!

So what happens is, suddenly people WITH genertors start waiting in lines already.  They dont need them but they know the black market price is huge so they can make a killing, so they stand in line.   This ends up increasing demand, and the prices even more... to the point of where most people probably aren't even buying the to use, but to resell.

 

Now who's waiting for these price controlled products.  Those who can afford to, the working poor are working and they can't.  The non-working poor can't afford it.  So it's usually middle class stay at home parents/partners, people who have flexible work schedules, and then people paid to shop for those people and the rich.

 

All price controls do, is allow the middle class to screw the poor harder then companies would have.   This gets even worse if the price controls aren't funded with price supports because suppliers will drop out of the market.