There is a saying that the only things certain in life are death and taxes. And the only thing permanent is a government program. The inability of the federal government, and state and local governments, to terminate programs that don’t work is proof of the latter. Instead of getting rid of the old programs that don’t work, governments just set up a new program – again and again. Which results in four or five (or more) programs all trying to solve the same problem, and none of them doing it well (if at all).
Overseas, the forever programs are often subsidies: for food, fuel, etc. In theory, the subsidies are set up for good purposes: to help the poor. (Of course, they are also set up to help politicians – get votes.) The problem is that, over time, the subsidies become more and more expensive, as costs go up and prices don’t. And corruption seeps in: subsidized fuel, for example, is sold to neighboring countries where prices are subsidized.
The Ecuadorian government tried to eliminate fuel subsidies, originally established in the 1970s, that had become unaffordable. But the public didn’t care why the government wanted to do it. They saw their gasoline prices going up a lot, and they didn’t like it. And since it was the government raising prices, instead of a free market price going up and down, in little bits as supply and demand changed, the public had somebody they could blame – and somebody they could force to change its mind. Which the Ecuadorian government did after two weeks of protests, riots – and deaths.
Which ought to be a lesson for governments on why they shouldn’t start down the road of subsidizing prices. Except that too many politicians, all over the world, care more about the next election than the future. Because the next election is the only future that matters to them.
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