Economics Questions

Re: Good information on Loan Subsidies?

Bogart — Tue, 02 Oct 2012 21:20:06 GMT

That chapter really does a great job of extending the concepts of mucked up Economic Calculation from the socialist commonwealth to really any activity of coercive government and how that activity eventually leads to impoverishment through mis-allocated scarce resources.

Re: Good information on Loan Subsidies?

Watchdog — Tue, 02 Oct 2012 19:57:21 GMT

So, after looking into this, they are providing loan guarantees to "qualified" banks for providing these loans to fruit growers who have been impacted by the bad growing season. Additionally, it covers administrative costs for providing the loans.

Obviously this provides a moral hazard and encourages mal-investment.

Re: Good information on Loan Subsidies?

Bogart — Tue, 02 Oct 2012 18:32:18 GMT

The best information on any government intervention is in the book "Man, Economy and State" by Rothbard chapter 12. You can download the book from this website.

It is a discussion on theme of Economic Calculation where the planners have access to a free market pricing system. In the case of a subsidy the planners skip the market based pricing system and create "Islands of Chaos" in the economic system as producers can not determine the best uses of scarce resources.

Good information on Loan Subsidies?

Watchdog — Tue, 02 Oct 2012 14:34:11 GMT

In Michigan the just passed loan subsidies for fruit growers.

http://michiganvotes.org/RollCall.aspx?ID=630725

I am wondering if anyone can direct me to some good writings on this particular kind of government interferance.

Thanks in advance!