Friday, June 22, 2007

Another tinkering example

Given the negative economic and environmental effects of U.S. sugar programs, why do they persist? Because Congress often decides to confer benefits on a favored few at the expense of the general public. In this case, the favored few really are few—about 42 percent of all sugar program benefits go to just 1 percent of sugar growers. These large sugar growers, such as the Fanjuls of Florida, are a notoriously powerful lobbying interest in Washington. Federal supply restrictions have given them monopoly power, and they protect that power by becoming important supporters of presidents, governors, and many members of Congress.
The Washington Post lamented the political corruption caused by the federal “sugar racket.” More than that, sugar policies are a textbook case of economic damage done by big government intervention in the marketplace. -- Chris Edwards

No wonder we're getting pumped full of high fructose corn syrup.

More importantly, this is an excellent example of how a moderate subsidy can end up costing more than 10 times as much at the checkout counter.

Cato Institute Tax & Budget Bulletin

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