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. 

I would argue that it really depends on what open source software you're talking about ...

Switching from a commercial database (Oracle or MS SQL) to an open source database like Postgres would likely result in substantial savings, as would running your servers on an operating system like CentOS/Redhat or your desktops on Ubuntu, as long as you can "get away with it". Small start-ups often save a substantial amount of money due to not having to pay insane licensing fees for this software, and often have lower support costs, but large corporations and the government often take decades to make these kinds of changes due to legacy systems being built for particular databases or operating systems.

There is a second topic and that is readily available software vs. custom software, and it has been my experience that large organizations (corporations and governments) tend to be guilty of spending 10 to 100 times as much on custom software rather than using commercial or open source software packages that are readily available. I have been in several of these organizations where they have built their own buggy time tracking software that has 50% of the features of something they could have gotten for free because they wanted to develop this package internally because they believe their problems are "unique".  In almost all cases, it is better for a company to use this readily available software and to write an extension/plug-in if they truly have needs that are not being met by the software than to produce something truly custom.

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

The Wikipedia article on subsidies ( http://en.wikipedia.org/wiki/Subsidy ) mentions that:

"Examples of industries or sectors where subsidies are often found include utilities, gasoline in the United States, welfare, farm subsidies, and (in some countries) certain aspects of student loans."

So the claim that oil companies receive significant amounts of subsidies doesn't seem too far off.

On the thread topic: Call me naive, but I doubt that our governments are wasting money just for the fun of it. I don't think they're idiots either, if there were very easy ways to save significant amounts of money, I believe they would probably take action.

That doesn't mean that there are absolutely no reasonable ways the governments could spend money better and more efficient. I just believe that the most reasonable actions are often not taken simply because they would be unpopular. Which in my opinion is maybe the biggest downside of democracy: Politicians not doing what's best, but what's popular.

I believe the public is actually more to blame than the goverment. For example: Here in germany, the national debt is so high that already a few years ago, 20-30% of all tax money was spent on interests alone. (Currently that value is down to about 10%, but only because interest rates are extremely low at the moment, but that can change again quickly). And it's been like that for decades. If the public had really tried to keep national debt down by paying higher taxes in earlier times, in the long run they would pay much less. But since politicians fear raising taxes because they're afraid of the voter's response, they only do it if it's absolutely unavoidable. The opposing political party will always come up with some self-proclaimed expert in economics telling the public want they want to hear: Some at first sight plausible argment why in the current situation, raising taxes would be the worst thing one might possibly do. And that of course rather than raising taxes, the government shouldn't waste so much money.

And whenever the government wants to cut spendings, no matter how reasonable it would be, there will be loud protests from those who are in some way affected. Everyone's against subsidies - except those that I myself profit from of course!

Call me crazy... but when someone says "Such and such has a lot of subsidies."

Then someone says "Like what"

Then the other person can't come up with anything....

I'm going to guess this isn't the case until someone can actually come up with some subsidies.

The closest think oil and gas companies have to subsidies are tax credits that allow them to bring tax deductions foward compaired to other tax deductions.

Which are tax deductions the oil companies would get anyway... so eliminating them brings the government no new revenue, only pulls revenue foward that it would get later.

I have.  Which is why I know it actually increases costs when it comes to farm subsidies.

For example.  The Ethanol fuel farm subisidy for corn given to farmers who set aside corn for the ethanol fuel market.   This causes about 40% of the US corn supply to be diverted to ethanol.

This causes corn prices to skyrocket... and meat prices to skyrocket because corn feed is more expensive, and anything with high fructose corn syrup to skyrocket in price.

Knowing the basics of something is all well and good, but won't help you a lot of the time when dealing with the real world.

I'll believe that when people actually back it up. People usually just higlight the cost of being in the EU and disregard the benefits in order to prove their point.

... Have you?

I think we should get rid of ethanol.  At least the 10% mandate in regular gasoline.  Ethanol does pretty much nothing to reduce polution it does make gasoline less fuel efficient and its harmful to engines.  Also more oil is consumed in making it on fuel and fertilizers then actual Ethanol is gained.

Grain ethanol is not efficient, but there are other types of ethanol that are.  Beet or Sugarcane-based ethanol actually produce more ethanol at a significantly lower cost.  According to the US government, 50% less cost.

So you don't think possibly trying to improve the efficiency of an internal combustion engine would be a good idea, but getting rid of ethanol is?  The trade off of using less oil is a 4% loss in MPG.  The issue with engines is the interaction with ethanol and the plastics used in engines, typically found in the intake manifold and fuel system.  Modern engines are designed to handle a certain amount of exposure to ethanol, though not all engines are compatible with E85 or E90 (Brazil).  Parts and computer calibration can all be modified or adjusted to compensate for the ethanol.  However, 10% ethanol won't damage an engine.

There isn't an endless supply of oil.  We either need to figure out a solution to our oil consumption or we will face the reality that one day we won't have any to fuel our cars with.  Burying our heads in the sand and saying we don't have a problem isn't going to stop us from heading toward a cliff we can't avoid running off of.  We can either begin dealing with the increased costs of alternatives now, rather than wait for another 10-20 years before the cost of everything that uses petroleum becomes either non-existent or so expensive that it becomes unaffordable.