Sunday, 25 September 2011

subsidies-at whose cost?

Subsidies in punjab, for rice and wheat which are not responsive to price, are wasteful expenditure and lead to high fiscal deficits , meanwhile low supply of fruits and vegetables leads to inflation, here i quote steven landsburg on a similar topic-
the author is being served at a restaurant with a numbered queue, one person(no.37) got tired of waiting and gave her number to another person(no.45),everyone at the restaurant praised her for not wasting her place in the queue.What these people failed to realise was that one person moving eight places ahead means moving eight people one place back, without changing the only thing that matters-the number of persons being served
the underlying point is that things must addup.Politicians routinely give things away for free making economists wonder where the extra resources are going to come from.Tell that to the politicians in Punjab....!!!

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