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Subsidies stimulate higher US production, which depresses global prices. If subsidies were removed, cotton and textile p...

Subsidies stimulate higher US production, which depresses global prices. If subsidies were removed, cotton and textile prices would go up. As both a US taxpayer and a textile consumer, do you recommend that subsidies (1) be increased, (2) be maintained at current levels, or (3) be eliminated?

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Answer #1

I think subsidies should be eliminated.

Subsidies is a form of market intervention which results in market failure. Such subsidies can result in a situation in which the price of the final product does not correctly reflect the scarcity of the resources. Also, subsidies distort industry structure in which one industry is given preference over the others. So, I think subsidies should be removed.

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