05-27-2009, 11:20 AM
We have skirted around it, but there is also the issue of direct costs.
Hershey's chocolate syrup is made in the USA...Nestle is made in Canada. The US subsidizes corn syrup; Canada doesn't. Hershey's syrup uses corn syrup while Nestle uses sugar. The same can be said about many other products. My tax dollars artificially lower the price of corn syrup which causes Hershey to use it rather than sugar. So when I go to Kroger and purchase Nestle's, I'm paying the actual cost (thank you NAFTA!) to produce and ship it. On the other hand, the Hershey syrup is actually more expensive than the price tag...I've already paid for the corn to be grown, the processing facility to turn it into syrup, and the bureaucracy to oversee the subsidies...so I've already paid part of the cost through my taxes. Up until this year, Nestle's had a lower price tag than Hershey's...but the price of Nestle's has gone up. So a person looking for the cheapest option will now purchase Hershey's, even though it is actually more expensive once you factor in the taxes...as the government has hidden many of the costs and cause us to make economically poor decisions by lowering the perceived price.
The government does quite a bit of this with the airlines, professional sports teams, and various other things. The cost to take Amtrak is, I believe, much closer to the real cost. I'd love to see a study comparing the true costs for planes vs. trains. vs. cars.
I am not attempting to explain subsidies, which have been discussed here, but rather to focus more on direct (perceived) and indirect (actual) costs.
Btw, the Nestle syrup, imo, is much better than the Hershey syrup.
Hershey's chocolate syrup is made in the USA...Nestle is made in Canada. The US subsidizes corn syrup; Canada doesn't. Hershey's syrup uses corn syrup while Nestle uses sugar. The same can be said about many other products. My tax dollars artificially lower the price of corn syrup which causes Hershey to use it rather than sugar. So when I go to Kroger and purchase Nestle's, I'm paying the actual cost (thank you NAFTA!) to produce and ship it. On the other hand, the Hershey syrup is actually more expensive than the price tag...I've already paid for the corn to be grown, the processing facility to turn it into syrup, and the bureaucracy to oversee the subsidies...so I've already paid part of the cost through my taxes. Up until this year, Nestle's had a lower price tag than Hershey's...but the price of Nestle's has gone up. So a person looking for the cheapest option will now purchase Hershey's, even though it is actually more expensive once you factor in the taxes...as the government has hidden many of the costs and cause us to make economically poor decisions by lowering the perceived price.
The government does quite a bit of this with the airlines, professional sports teams, and various other things. The cost to take Amtrak is, I believe, much closer to the real cost. I'd love to see a study comparing the true costs for planes vs. trains. vs. cars.
I am not attempting to explain subsidies, which have been discussed here, but rather to focus more on direct (perceived) and indirect (actual) costs.
Btw, the Nestle syrup, imo, is much better than the Hershey syrup.
Michael
My primary goal is a large Oahu Railway layout in On3
My secondary interests are modeling the Denver, South Park, & Pacific in On3 and NKP in HO
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My primary goal is a large Oahu Railway layout in On3
My secondary interests are modeling the Denver, South Park, & Pacific in On3 and NKP in HO
<!-- m --><a class="postlink" href="http://thesouthparkline.blogspot.com/">http://thesouthparkline.blogspot.com/</a><!-- m -->