tag:blogger.com,1999:blog-2938311055760665357.post7088489002093148875..comments2024-03-27T03:49:12.592-07:00Comments on Ed Dolan's Econ Blog: U.S. Ethanol Subsidies: A Bad Policy That Refuses to DieEd Dolanhttp://www.blogger.com/profile/08757995049056872214noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2938311055760665357.post-191347109515678472011-05-24T10:58:05.569-07:002011-05-24T10:58:05.569-07:00Anon: Good points. Here are some very short respon...Anon: Good points. Here are some very short responses:<br /><br />1. If we had to import more oil to replace domestic ethanol, gasoline prices would be slightly higher, although not much since the ethanol offsets only a very small part of global oil supply. If ethanol tariffs were removed at the same time as the tax subsidies (my recommendation), gas prices would probably not go up at all.<br /><br />2. Higher gasoline prices are not bad in themselves. Gasoline should be priced to reflect all externalities (not just climate change but also national security costs, local air pollution, highway congestion, and so on). In my opinion, gasoline is currently priced too low in the US. (For more, search for the topic "affordable energy" for several previous posts on that topic on this blog.)<br /><br />3. Jobs may be lost when any business closes. That does not mean it is a good idea to subsidize it just to save the jobs. For example, Monday's NYT had an article saying that many candlepin bowling alleys are closing in New England because tastes have changed and not as many people go in for that sport any more. Jobs will be lost. That is not a reason to subsidize candlepin bowling. In the long run, we are better off to let market forces move resources, including labor, into businesses that produce products that are worth more than the inputs used to produce them, and therefor can operate without subsidies.Ed Dolanhttps://www.blogger.com/profile/08757995049056872214noreply@blogger.comtag:blogger.com,1999:blog-2938311055760665357.post-32985176734899341292011-05-23T16:33:23.934-07:002011-05-23T16:33:23.934-07:00The one thing that everyone over looks or fails to...The one thing that everyone over looks or fails to understand is what would the price of gas be if we had to import 13-15 billion more gallons of gas. Consumers would not just have to pay the increased price on the additional 13-15 billion gallons but on all of the 130,000 plus billion gallons of gas we consume. Also the direct and indirect jobs that the ethanol industry provides in the USA. Also ethanol has helped the balance of payments. <br />Cliff LarsonAnonymousnoreply@blogger.com