What is a subsidy?
Subsidy usually means gratuitous financial support. For example, if for whatever reason you live much below the living average paying utility services in full might be too expensive - you'll be out of money before you even think of buying food and basic clothes. Yet it's clear that once can't live in a city without utility services.  So the government might have a program for subsidizing utility services for people with very low income - a person brings in proof of low income and once it is low enough government will step in and pay that person utility services in full or in part depending on actual income he proves. The same can be organized for anything government or some organization wishes to support for whatever reason. The key idea is someone gives you free money for spending on some specific purpose. subsidy - financial support. For example subsidized housing - when the government pays a part of your rent (usually for low income families). or subsidized student loan - when somebody else is paying interest on the money you borrowed while you are in school. It means a government giving out money to encourage a particular product (or service) to be bought or sold. Some people will use the word more loosely to refer to any financial incentive, even if it's not coming from the government. Wikipedia has a list of examples that may be helpful: http://en.wikipedia.org/wiki/Subsidy A commonly-mentioned one is farm subsidies, where farmers are paid to produce certain crops. A subsidy is a payment made by a group (usually the state) to individuals or corporations in order to shift the balance if the rational economic decision for the individual would be detrimental to the group as a whole otherwise. For example, if there are different quality kinds of crops that can be planted, for example a GM maize that brings in high yields but can only be processed to High Fructose Corn Syrup or a naturally bred corn that brings lower yields but tastes well enough for direct consumption, then if demand for both exceeds supply, the economic choice for the individual farmer is to plant the former. If the claims that HFCS contribute to obesity are founded, then it is in the public interest to produce less of it, and more alternative foods. Given that a market rather than a planned economy is desired, this cannot be achieved by decree, but rather money is used as an incentive. In the long term, this investment may very well pay off through reduced health care costs, so it is a rational economic decision from the state's point of view. In a world where all actors make decisions that are fully in their self interest, in principle subsidies would not be needed as consumers would demand healthy rather than cheap foods, and market mechanisms would provide these.
That's a completely false statement. You really should read something for yourself instead of parroting misinformation. Per the US Energy Information Administration's 2015 report, more than 50% of all subsidy money ($15 billion of just less than $30 billion) is for renewables while producing less than 15% of energy with solar accounting for a whopping 0.005% (rounded up).   https://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf  By contrast, liquid petroleum and coal received only ~$3.4 billion in subsidies produced 66% (rounded down) of energy.   The moral of the story is: just because you want something to be true really badly doesn't mean it is. A Loan is an loan that gives some kind of benefit as an assurance to a loaning organization. So when you put in an application for a credit, you likewise advocate that in case that you can not pay, you've some form of benefit that will cover the default sum. Well you would have to take into account 2 things. 1 the taxes and regulations that fossil fuel industries face relative to renewables. 2. subsidies as a percent of fossil fuel industry compared to subsidies as a percent of green energy companies. My hunch is that both of these points show that overall, the fossil fuel industry isn't benefiting from the government and renewable companies are benefiting &gt; It's still free money from US to build a system for THEM so they can sell the power back to us at a profit.  Sure, because otherwise they can't make a profit and thus wouldn't build the system.  That's the point in subsidises. Investment in public infrastructure is different than subsidy to private companies. Comparison to the interstate system here is irrelevant.   The state of Wisconsin is giving a company $230k per worker per year in tax breaks for jobs that will pay the workers $53k per year. There is no tax rate that can earn that investment back for the state. In fact, that state income tax rate on these salaries is 6.27%. Even considering all of the additional jobs that will be created for construction and as an effect of having a large employer in the area, this investment will never pay for itself in terms of taxes generated. "Companies often provide cafeteria, or catering services, to employees tax-free at subsidized rates. I'll use ""cafeteria"" as an illustration. The IRS says that in order to avoid lunch being taxed as income, the employees must pay the ""direct costs"" of the lunch, food and labor. In addition to those costs, cafeterias add two more items to come up with the total tab; ""overhead,"" (the cost of renting the space), and of course, profit. The company can waive the last two, and charge employees only materials and labor. That's why subsidized cafeteria food can cost as little as half of what it would cost elsewhere." I think increasing funding to public colleges are an -okay- thing to do.  Certainly it is better than the current system which guarantees student loans to benefit the bankers.  So, we're talking about two different kinds of subsidies: one directly for schools and one for bankers.  While ideally, I'd like to see no government involvement whatsoever, I can compromise as long as bankers are bearing the full risk of their student loans.  The student loan system is what is bubbling up tuition prices, very similar to what happened in housing. What subsidies are you talking about?  From wikipedia:  &gt;&gt;'The USPS has not directly received taxpayer-dollars since the early 1980s with the minor exception of subsidies for costs associated with the disabled and overseas voters'    More like small businesses are grateful there is a service they don't have to pay excessive administrative taxes to use and are sad the greed in the US is going to wreck yet another piece. The value of privatization is such a horrible scam. &gt;&gt;The US remains wedded to its allegedly free market leanings despite revelations that JP Morgan, among others, receives $14 BILLION a year in government subsidies.  I don't think you'd get much more argument from American taxpayers (big or small) that subsidies if/when they are justified should come with requirements to make sure the public interest is truly being served.  What is less clear is that holding stock in businesses that the government has decided to subsidize means the government should control the pay of the parent company's execs.  Disclaimer: I identify conservative with libertarian leanings and do not (to the best of my knowledge) own stock in any bank or bank-like entity "Similar, but actually quite different.  A negative income tax on the first $20,000/year has a couple of problems this scheme doesn't:  1) Administration costs and legal complexity.  Are we ""prebating"" or ""rebating"" the stipend?  How is someone supposed to get along if they lose their job unexpectedly in a rebate-based system, can they get their income-tax withholdings back up to $20,000/year?  How does the government register changes in income to know when to write someone a check?  2) With a negative tax up to a certain *fixed* level, there's effectively a changing level of subsidy depending how much of the per-capita income is the break-even tax level.  If the per-capita income is $45,000/year (our current GDP per capita), then the subsidy level is almost 50%, and if it goes up to $60,000/year (our current mean household income), the subsidy level is then 33%.  The system I described and steepk (IIRC) invented fixes the subsidy percentage in relation to the mean reported income (effectively fixing a *relative class level* as minimum) rather than a particular monetary amount (whose relative buying power versus inflation or other incomes can fluctuate wildly).  We pick a subsidy level, say 1/3 (33.33333%).  We then impose a flat income tax of that level plus a little bit more for administration costs (say, 35%).  At the end of the year, everyone is taxed at that flat level, and the government scrapes its administration costs off the top and now has a big pot with 1/3 of everyone's income in it.  This is divided into one portion for each taxpayer, and those portions into monthly or biweekly pieces.  These pieces are sent out regularly as checks to the taxpayer, and *these checks are not taxed as income*.  That last bit is what makes this so nice: it turns the tax progressive, in fact more progressive than our current system.  After taxes and *after stipend*, only the rich will pay an *effective* tax rate asymptotically close to the real 35%.  Most people without incomes many, many times the size of their stipends will be looking at an effective tax rate of less than 15%, including the tax-paying middle class and the professional upper-middle class who currently bitch so much about our tax rates being so confiscatory (which they *are*, for the abysmal level of social services we receive).  Now, to get back to the big benefits of fixing the subsidy percentage.  This means that the subsidy grows with mean income, effectively functioning as easy to run, fair, and direct wealth redistribution without the difficulty of trying to create efficient, productive WPA-style jobs or imposing market-distorting subsidies.  It also means that we can allow things like automation to improve the productivity of our economy because *everyone* gets a share: if automating a certain job is truly more efficient than having a worker do it, the capitalist's income-gain from automation will push up the mean income, and therefore the basic income, further than the worker's lesser income and the capitalist's lesser profit would have." well, but to the best of my understanding we *do* subsidize the Koch Bros extremely heavily.  my sense of things is that Soros is not popular with the powers that be, and left out of the subsidies, but please enlighten me if i am wrong.  i am interested and curious.  also cynical but thats another post.  hah Yes, your assumptions are correct. The industry realizes that the equilibrium price of product A is $10. The government decides to increase the amount of people who can access product A. They do this by subsidizing $5 of the $10 dollar cost. However the industry reacts by increasing the cost of product A by the amount of the subsidy (so product A is now priced at $15), because the industry knows people already can afford paying $10.  This is not exclusive to medicine, it is also happening with higher education. Here is a paper that examines the effect of government subsidization of college tuition. The study finds that as financial aid increased, there was a 102% correlation with the increase in the cost of tuition. http://www.nber.org/chapters/c13711.pdf A service provider that prevents competition by making it illegal to compete. Every other insurance program allows you to opt out. And i wouldnt consider it protection when they stick there dick into everyone elses business. Every gang or mafia claims to protect those it shakes down.  Edit.. Just because you wear a brown shirt doesnt make you a righteous person. Clearly the semantics of the discussion are of greater importance to you. Hospitals are not directly subsidized by the government.   Medicare originated with two parts: Part A: Medicare Hospital Insurance (HI) which covers hospital / hospice costs and Part B: Supplementary Medical Insurance (SMI) which covers outpatient costs.   Part C was added later by Clinton, which set up a system of selection of health insurance through private companies, and those private companies are then subsidized by the federal government. Not really.  There are rules against subsidizing markets that inflict injury on like industries among WTO nations.  Bombardier is violating that rule by getting subsidies for commercial airliners.   Boeing gets government loans for Department Of Defense contracts, but not for commercial jets.  Canada has a bad habit of side stepping NAFTA and WTO guidelines and they're upset someone is finally calling them on it.  If Canada wants to subsidize markets that fellow WTO nations do not participate in, fine. They have that opportunity. Bombardier was not that.