Should the Government be Subsidizing? Is it Good or Bad?

This was in my inbox this morning. Made me wonder whether or not the government should be subsidizing consumer goods. I thought business and the economy was driven by consumer demand.


"U.S. Rep. Richard Burr will have an important role in determining whether a $15 billion price increase on smokers is passed. The U.S. Senate has passed a bill that includes a $12 billion buyout of tobacco quota holders as well as $3 billion more to pay for Food and Drug Administration (FDA) regulation of tobacco products. The FDA would be involved in all parts of the tobacco business, from farming and production, to taste, price and the availability of discount coupons.

If the Senate bill becomes law, the cost of cigarettes will increase. And with tobacco products under FDA control, non-elected government officials could create whatever new regulations they can envision, such as the elimination of discount coupons for cigarettes.

Fortunately, the House of Representatives passed tobacco quota buyout legislation that won't increase the price of cigarettes and doesn't give the FDA control. Now, select Senate and House members must meet to draft a compromise proposal.

(took out name of website) encourages all North Carolina adult smokers to take a moment to e-mail Rep. Richard Burr today and urge him to support the House approved tobacco buyout bill that does not include tax increases on hard-working smokers or FDA regulation of tobacco. .... Signed R.J. Reynolds Tobacco Company

When is it appropriate, if ever, to subsidize consumer goods? What happens when the government does a "Buy Out?"