RE: Scientists: Nuclear power isn't viable without corporate welfare
Bad Policy Drives Out Good Policy
I was talking to a friend last week about turbulent economics and upside-down tax policies. The conversation led from one thing to another and I shared with my friend that the perfect survival stash would be a $1,000 bag of pre-1965 silver coins which would cost in excess of $20,000; the perfect currency to have when the dollar collapses and the economy tanks. My friend thought I was being a bit paranoid. However, the history of all currencies not backed by gold or silver is that they eventually become worthless.
?Bad money drives out good money? is the old saying. And the perfect example is pre-1965 silver coinage. In the normal day-to-day transactions how often do you see a coin minted before 1965? Never! The bankers and collectors have combed the money supply clean of these 90%-silver coins. They have become much more valuable than their legal, face value.
Now let?s say you have 2 dimes in your hand, one a pre-1965 coin and one minted last month. One is 90% silver and the other is mostly copper. You owe a dime debt to be paid today; now which coin do you use to pay the debt? Of course, you pay with the nearly worthless copper clad-dime and hold on to the silver. Each is legally worth 10 cents. But one is ?bad? money (copper) and one is ?good? money (silver). Why would anyone pay more than the debt requires and the copper clad dime must be accepted as legal tender? The money is subsidized by the good-faith credit of the government.
This is why most economists realize any subsidy, for any endeavor, is bad policy. The goal may be worthwhile but the result is economic disaster. The subsidy attracts capital that would normally be used in a more worthwhile economic activity. Cheap money gets used instead of expensive money, but even worse, a more favorable economic activity is not done because it?s now cheaper to do a less favorable economic activity. The less favorable activity drives out the more favorable activity. It?s called ?Lemon Socialism.?
All subsidies for corporations for any reason are bad business. All subsidies, in the form of tax deductions, exemptions or credits, for the individual are also bad business. Behavior shouldn?t be manipulated by offering cheaper money. ?Bad money drives out good money.? Green energy subsidies drive out better economic energy policy. The consumer pays more for the same output and the better energy dies from a lack of support. Bad policy drives out good policy.
