Economic Effects Of U. S. Sugar Subsidy Policy Essay Example for Free

Economic Effects Of U. S. Sugar Subsidy Policy Essay Economists have for a long time studied and discussed the various effects of government subsidies and government support for specific industries and markets. In fact, in many colleges and universities, there are specific courses that are dedicated to the effects of public policy to both private and public firms as well as the overall market in which these firms operate in. These economic concepts, in turn, help policymakers make sense of the causes and effects of various incentives that are driven by government interventions to the market. However, as we shall soon discover in the discussion in our paper, even the science and economics have conflicting theories regarding such public incentives and support to industries. In fact, over the decades in the development of public policy and micro economic choice, steps have been made so much so that various domino effects work experience. However, this does not mean that any theoretical or conceptual model could not be applied to real world situations even various market imperfections where in traditional economic theories break down. In fact, even with the assumption of perfect markets which is a basic impossibility especially in todays complicated economy and arena of public policy economics may be able to predict and forecast various results from decisions that are made by the government with respect to incentives and disincentives within industry. In this paper, we shall be looking at the effects of the United States sugar subsidy policy. In order to do this, we would be using the three basic analytical tools that come from the larger body of micro economic analysis. The first is by using a comparative static model of incentives within a market by government intervention. The second analytical framework that we shall use is another comparative static model with regards to the median voter theorem and its effects to public choice in sugar subsidy policy in the country. The third framework which we shall be using is that which has been developed by recent Nobel Prize in economics winners in the analysis of government support and its overall effect in the arena of globalization and international trade. By using these analytical frameworks, we hopefully could be able to capture the economic effects of the United States sugar subsidy policy not only in the industry itself but also in the country as well as the consumers living in the country as well. Comparative Static Analysis of the United States Sugar Subsidy Policy in an Economic Market The first analysis that the papers shall be using is a comparative static analysis of a subsidy granted by the United States government to the sugar industry in the country. A comparative static analysis is simply an analysis of an economic incentive or even a disincentive while holding all other things constant. In the real world, a comparative static analysis may be difficult to implement and make sense of especially because variables affecting the market, the industries, or even individual firms, interact with each other all the time. However, if we are to integrate all the variables involved perhaps using econometric estimation and lean your regression analysis in order to indicate these variables we still would not be able to segregate the effects of a single factor in this case a policy which gives the sugar industry subsidy the overall economy. The discipline of economics usually makes use of such all other things held constant rule in order to make the analytical framework more clear and the analysis more concise by segregating just one variable. The analysis of the sugar subsidy policy uses a micro economic model of the firm. In this micro economic model, we assume a horizontal demand curve because the firm is a price taker and imposition of the marginal cost, the average cost, the average variable cost, and the total cost curve. In such a situation, sugar firms would choose to produce at that point where in price equals marginal revenue equals marginal cost. In such a condition, the affect of aggregating all the firms in the sugar industry would give us the traditional perfect market situation downward sloping demand curve upward sloping supply curve. This is a situation where in there is not yet any subsidy which the government had chosen to implement in the sugar industry. However, in the case that the government chooses to give subsidy to the sugar industry, the effect would be to significantly reduce the average cost and total cost curves of the firm by reducing the fixed costs. In a partial equilibrium model, it would result to the shifting of the supply curve to the right and therefore the ability to produce higher quantities by the firm while at the same time effectively decreasing the price of sugar. This is the approach using traditional analytical frameworks of microeconomics in order to understand the subsidy that is made by the government. In fact, this analysis may be implemented into any kind of industry which is subsidized by the government in order to produce its final output. However, we must remember that this is approach only using an economic model. In order to understand the applications of such a theory and to prove it, economic researchers have estimated and made various studies to show that this is indeed the case that the curse in real-world events and could have a significant effect even considering all variables into the analysis. Of course, in order for the theory to hold, econometric estimation must also be able to prove that subsidies do in fact affect the supply curve of the industry. This is exactly what has been constituted in the larger body of research regarding government interventions to specific industries. As early as a study made in 1977 which analyzed the equilibrium effects of United States sugar policy, significant supply curve shifts were estimated by economists after such super policies regarding subsidies had been implemented by the government (Gordon Gemmill, 1977). In fact, as the research noted, although there was only a minor influence on the price that was implemented after subsidies had been injected into this sugar industry, quantities significantly change as a result of the increased supply that was allowed by the subsidy. Earlier in 1970, there was already indicate that legislative bias for the United States sugar program which involved a high degree of domestic protectionism which simply means that injection of policy by the government to sugar producers. However, an interesting thing to note in such study is that not only were the policy recommendations for the domestic sugar industry but also for international and foreign countries sugar industry as well locations which have comparative advantage in sugar production and which could directly benefit the United States in the long run if such industries were conducted. This analysis would be integrated into the third concept and discussion of our paper. What is important that this research is pointing out, however, for this section, is that sugar subsidies do indeed increase quantities of sugar producers because of the lowering of costs as a result of the subsidy. In fact, such quantity increase effects are not only segregate into the United States but other countries as well. In many developing economies, and in economies which are significantly different from the United States, an increase in market subsidy to the sugar industry also increases quantity in those countries, showing that such economic effects are not only segregate into one geographical location and one kind of economy but also to the spectrum of economies of countries as well (Nelson Panggabean, 1991). In such a partial equilibrium analysis, perhaps the immediate conclusion that could be made is that it is beneficial to consumers as a whole. Using the framework, it would be obvious that the lowering of price and the lowering of the production cost of sugar in the sugar industry would be beneficial both for sugar farmers as well as the consumers who would be buying sugar. However, a negative effect that a subsidy may make in such a framework is that it could be unfair to those directly competing against the sugar markets. However, such an argument may not be so strong. The arguments against the subsidy is made by the United States government to the sugar industry could be further developed in the second and third section and analytical framework of the paper. The Median Voter Theorem and Why There Are Sugar Subsidy Policies in the United States An argument that has been developed by economists which goes against recommendations for implementing subsidies on certain industries is the implementation of the median voter theorem. Remember that subsidies are basically policy recommendations that are made by individuals such as lawmakers, legislators, and the greater body of politicians. According to standard economic theory, these individuals in a representative government are selected by the population through the mechanism of voting. And if we consider the population distribution to be a perfectly normal bell curve, there are individuals in extremes of the issue in this case not to implement a subsidy and to implement full subsidy but a larger number of people in the median area of the population distribution. However, the median voter theorem also states that there are discrepancies within the voting situation. A powerful group which has lobbying power, although would derive less benefit from the summation of all consumers, could be able to conceivably shape electoral results because of such lobbying powers and financial support since they are the ones who have a larger incentive in the choosing of a certain candidate which would eventually approve a sugar subsidy policy. For example, consumers would not give a few dollars each in order to lobby against support for a certain policy, but the sugar producers, who have enough incentives, maybe both lobby themselves to carry out such a vote. Even though the elected body of government representatives may in fact be the winner of the elections, it is not necessary that they won because they have the largest and best purpose of the consumers into mind. There are literature regarding such topic proving that the median voter theorem indeed does work in society where in there are individual lobbying powers and incentives for groups. In 1991, a study was made on electoral and voting process where there are specific preferences for individuals with larger incentives and the aggregate society. This study points out that even though there are larger benefits and welfare implications for the whole society if a specific policy is not implemented, having less incentives than those wishing to implement the policy would eventually drive the vote towards those with greater incentives (Caplin Nalebuff, 1991). Another article published earlier in 1989 presented such a theoretical model in the analysis and determination of the level of Social Security that is provided to individuals. Again, they use the median voter theory in a representative democracy and capital market. As has been shown, there are more incentives for some individuals to lobby against the policy and even though Social Security increase would benefit the society greater, it was not implemented fully because of such lobbying power of specific sides (Boadway Wildasin, 1989). Trade Theories and the United States Sugar Subsidy Using standard economic trade theories and frameworks, we could perhaps be able to develop the best argument against the government implementing a specific policy for protection reasons or for any other reasons that are offered in the legislative body. Instead their trade theory, implementing a protectionist policy such as the subsidy would lead to a less efficient comparative advantage situation in the sugar industry in the United States. Although it would definitely be able to provide short run increases in the income of producers, there are much worse effects. The first is that prices would be much higher in the domestic market. A subsidy together with a protectionist policy would make and force consumers to buy sugar at a higher price than that is offered in a global competitive market without such protectionist policies. If it was the subsidy alone, then it could be perhaps beneficial to the consumers while there are certain losses in the government model. However, usually, and specifically for the United States sugar policy with regards to subsidies, protectionist policies are also implemented. This means that consumers are forced to buy sugar at higher prices in the domestic market than they would otherwise pay if sugar was imported by countries which offer the same goods at lower prices in a perfectly competitive model of trade. As an overall result, there would be welfare increases for the side of the producer surplus but decreases in the consumer surplus and the government revenues. However, the dominant argument made by past and even some precedent economists is that some industries have to be protected because they do not have comparative advantage to other producers of sugar taking into consideration the implementation of free trade in the world today. Such arguments for example are the import substitution industrialization that had been put forward by two German economists in the 1960s which says that by protecting domestic industries in the short run, they would be able to catch up to the ventral comparative advantage. In fact, it is not only the United States sugar industry which implemented such policies but domestic agricultural goods all over the world especially in third world and developing countries. At first, this might have seemed like a good idea. However, eventually, it was found that implementing a specific subsidy to the sugar industry might have long term problematic effects. For example, by implementing such a subsidy, local domestic sugar producers would not have enough incentives in order to improve such sugar production technology. In fact, this has been proven to be the case. In the implementation of local production protection of sugar, less and less farmers were willing to innovate in the productive capacity given that there are even available technologies for such an improvement. The reason for this is that they are already enjoying lower production costs because of the subsidies. Such a framework eventually results in the shifting of the production frontiers of sugar in other countries while the production function of sugar in the domestic economy remains the same. The lack of incentives is a direct result from the lack of competition in an industry and the result is after a few years perhaps a decade productive technologies and capacities by other sugar markets would eventually overtake that of the domestic protected market. It is in fact already an interesting point that the United States is even implementing such sugar subsidy policies even though past economies and studies have been made regarding its detrimental effect to the long-run profitability of the market and the welfare of producers (Pollitt, 1997). In fact, we do not even need to look so far away for sugar subsidy policies have been implemented in the United States and the historical proof of the infectivity of such subsidy policies have already been well documented and studied by economists and policymakers (Horton, 1970). Even recently, trade liberalization policies were studied between the United States and the European Union sugar trade industry and were found to have detrimental effects in one market implemented a specific policy on the production of their sugar supply (Won W. Koo, 2002). Conclusion using these three frameworks, we could be able to conclude that by implementing a subsidy in the United States sugar industry, the country may be able to see short-term benefits because of price reduction and the welfare increase of sugar farmers and producers as low as those involved in the sugar market distribution. However, in the long run, as our analytical framework and even the practical research in previous literature and references have shown, implementing such a sugar policy is not only inefficient because of the actual background of decision-making through the median voter theorem, but also would be able to hurt the farmers and sugar producers themselves in the long run because of implementing a protection industry and the continuous decrease of comparative advantages as a result of the increase in technology in perfectly competitive markets which have not been subsidized by the government. To this end, economics teaches us that a subsidy, although helps in the long run producers, would hurt short run government revenues and consumers as well as long-run profitability of sugar markets from all aspects. References Boadway, R. W. , Wildasin, D. E. (1989). A Median Voter Model of Social Security. International Economic Review, 30(2), 307-328. doi: 10. 2307/2526649. Caplin, A. , Nalebuff, B. (1991). Aggregation and Social Choice: A Mean Voter Theorem. Econometrica, 59(1), 1-23. doi: 10. 2307/2938238. Gordon Gemmill. (1977). An Equilibrium Analysis of U. S. Sugar Policy. American Journal of Agricultural Economics, 59(4), 609-618. doi: 10. 2307/1239388. Horton, D. C. (1970). Policy Directions for the United States Sugar Program. American Journal of Agricultural Economics, 52(2), 185-196. doi: 10. 2307/1237489. Nelson, G. C. , Panggabean, M. (1991). The Costs of Indonesian Sugar Policy: A Policy Analysis Matrix Approach. American Journal of Agricultural Economics, 73(3), 703-712. doi: 10. 2307/1242822. Pollitt, B. H. (1997). The Cuban Sugar Economy: Collapse, Reform and Prospects for Recovery. Journal of Latin American Studies, 29(1), 171-210. doi: 10. 2307/158075. Won W. Koo. (2002). Alternative U. S. and EU Sugar Trade Liberalization Policies and Their Implications. Review of Agricultural Economics, 24(2), 336-352. doi: 10. 2307/1349764.

John Marshalls Court :: essays research papers

By the early 1800s, the debate over Federal power which had been so tactfully postponed when it surfaced in previous efforts at unification (i.e., the Constitutional Convention) had again inevitably reared its head once the government was established and the neutral greatness of Washington's reign had ended. As the major issue of the day, the controversy of States' rights versus big government permeated politics in a profound depth and completeness: it was reflected in the core beliefs and platforms of the major political parties of the day, and most issues were at unobtrusive levels reflections of this central conflict. Prominent politicians of the day, such as John Marshall and Thomas Jefferson, were also outstanding thinkers with very strong opinions on this issue. Several Acts of Congress proved the Legislature to be an effective battleground for the issue of federal power. In the end of the 18c, the Federalist Party enjoyed great political influence. Presidents and many congressmen represented the party's goals and served as opponents to those who sang too loudly the praises of "States' rights". Thus, Congress succeeded in passing legislature that seriously challenged individual rights. The Alien Act made assimilation and naturalization more difficult for immigrants, and the Sedition Act posed a substantial threat to First Amendment rights, as it specified punishment for "writing, printing, uttering, or publishing any false, scandalous, or malicious writings" about virtually any branch or aspect of the U.S. government. Such a clear subordination of individual rights to Federal power evoked a strong Republican backlash, in both State Assemblies and ballot boxes. The Kentucky Resolutions were passed in State legislature atta cking the Sedition Act, stating that "whensoever the general government assumes undelegated powers, its acts are unauthorized, void, and of no force†¦" (D) Two years later, Democratic-Republican Thomas Jefferson was elected President and Congressional elections followed similar trends, ending the long-time Federalist dominance. A second issue touched upon by the Kentucky resolutions was that of judicial review. The Resolutions asserted that "the government created by this compact" (i.e., the Constitution) "was not made the exclusive or final judge of the extent of the powers delegated to itself†¦" (D) This attacked the power of the Supreme Court to decide the constitutional validity of law and thus posed a threat to an important check on Legislative power. This document would not, however, dictate the future role of the Supreme Court; that precedent was instead set by Chief Justice John Marshall, in practice as well as in his 1803 Marbury v.

How effectively did governments in pre-revolutionary societies deal with social and political unrest?

Governments in pre-revolutionary societies, such as the Autocratic governments of Russia and China obviously did not deal with social and political unrest very effectively if they were unable to stop the impending revolutions in their respective countries. In each case the majority of the population were looking for changes in the way their governments were ruling their country, but in each case their ideas for a better country were not heard by their governments which subsequently resulted in vast social and political unrest. Such unrest eventually led to the downfall of each government system due to their inability to subdue the situation. In Russia as with China under an autocratic rule, the vast majority of the population, the peasants and proletariat, were unhappy with the way their governments were treating them. The peasantry in both countries were severely poor and often starved. This was not helped by the fact that both countries had very poor weather conditions in the winter months that brought food production to a virtual stand still. Peasants often did not own any land and were forced to work for landlords, who paid very little. Peasants were not happy with the current situation and wanted land reforms so they could own land for themselves. Unfortunately these pleas went unheard and so led to much discontent and unrest amongst the lower classes in these societies. The Tsar of Russia and the Empress of China were seen by the common person as a god-like deity selected by right of birth to rule the country as they see fit. It was their divine right, and as such this placed the Tsar and Empress in a social status all of their own, way above anyone else. This could be a reason why they did not even care about the peasants, to them they were nothing. They were too interested in their own problems to worry about the affairs of state. Only when their power was threatened did they listen, in Russia it was when the effects of ‘Bloody Sunday' threatened the image of the Tsar and in China when constant attack from westerners threatened to make people believe that the empress was losing the Mandate of Heaven. In both cases, the resulting reforms put in place by each ruler was a case of too little too late. The effects of their incompetence were too deep rooted by now to be disguised by such minor and insignificant reforms. The Tsar and the Empress were very similar in the fact that they were both stuck in their old ways. The Tsar of Russia was often more concerned with family affairs than the affairs of state and wished to keep the government system the way it was so that he could pass it on to his son Alexei. What he didn't realise was that by not concerning himself with the affairs of state, he was in effect sealing the fate of autocracy in Russia by causing great discontent in the failing incompetent government system. Similarly in China, the Empress resisted western ideas and wished to keep the current system of government. By letting western ideas influence the people, they might have realised how ineffective their current government was and wish to change it. This would mean a complete lifestyle change for the Empress which of course she was not interested in. So in both cases the government's inability to accept change brought about great unrest as the people wanted to modernise, as conditions in other modernised countries were a lot better than their own. The effects of war played a major role in creating unrest in both Russia and China. In Russia, the Tsar had a choice whether or not to continue the wars in which Russia participated but in each case he chose to continue the wars, even though it was obvious that Russia lacked the capability to maintain and supply an army away from home. The choices that he made only created more unrest, which the Tsar did not need. Obviously, if the Tsar simply avoided creating this unrest he wouldn't have had to deal with it, so basically by not creating this unrest is a very effective way of dealing with it, pity the Tsar did not see it this way. Unfortunately in China there was no choice as to what wars could be participated in, they were all in defence. But these wars could have been avoided, especially those with Britain over trade. China's unwillingness to change or modernise was a major factor in causing these wars, if it had been more open to western ideas not only could China have avoided war with Britain, it could have been better prepared for wars later on with Japan. Of course this did not happen and Britain defeat China in many ‘Opium' wars. Ports were opened up for trade and opium and cheap goods flooded in creating unrest amongst the merchants and peasants. China's response was to build up it's military and try to modernise by sending scholars abroad to learn western ideas. This was like shooting themselves in the foot, many of the scholars became accustomed to western ideas and philosophy and concluded that it was more efficient and that for modernisation to occur the whole system of government must be changed. So this was not the best way to deal with unrest, because now there were more educated people with western ideas trying to gain support to change the government. The Tsar's half-hearted attempt to solve the problems the arose after ‘Bloody Sunday' could be credited for pushing the people that bit further into listening to revolutionary ideas that were floating around at the time. The Tsar let the people have a Duma, so that they could have a say in how the country would be run, but he disbanded two Dumas in the first two weeks of their operation simply because they opposed him. Obviously the people did not truly have a say on anything because as soon as they wanted something that the Tsar did not like he simply disregarded it. Going back on his word was perhaps the most stupid thing the Tsar ever did, because now the people realised more than ever that the Tsar did not care about anything they had to say, so movements to oust the Tsar grew in popularity. In both Russia and China, the governments trying to come to terms with political and social unrest did not do a very good job. In most cases they actually contributed to the creation of even more unrest than what was originally being tried to subdue. By trying to control unrest in their respective countries, the Tsar and Empress helped bring about their own demise, so effectively they did not deal with unrest at all.

Who Enforces Daylight Saving Time

Does anyone actually enforce daylight saving time? Well, sure. If you forget to set your clock ahead in the spring and accidentally show up to work an hour late, your boss might have a few choice words about remembering daylight saving time the next time it comes around. But does any agency or entity actually have the responsibility to regulate daylight saving time across the United States? Believe it or not, yes. Its the U.S. Department of Transportation. The Uniform Time Act of 1966 and later amendments to the daylight saving time law state that the Department of Transportation is authorized and directed to foster and promote widespread and uniform adoption and observance of the same standard of time within and throughout each such standard time zone. The departments general counsel describes that authority as ensuring that jurisdictions observing daylight saving time begin and end on the same date. So what happens if a rogue state wants to, say, create its own version of daylight saving time? Not gonna happen. For any violations of the daylight saving time rules, the U.S. Code allows the secretary of transportation to apply to the district court of the United States for the district in which such violation occurs for the enforcement of this section; and such court shall have jurisdiction to enforce obedience thereto by writ of injunction or by other process, mandatory or otherwise, restraining against further violations of this section and enjoining obedience thereto. However, the transportation secretary also has the authority to grant exceptions to states whose legislatures request them. Currently, two states and four territories have received waivers to opt-out of observing Daylight Saving Time and the legislatures of several other states from Alaska to Texas to Florida have at least considered doing so. Especially in the so-called â€Å"hot weather states,† proponents of opting out of Daylight Saving Time argue that doing so helps reduce the effects of the economic and health consequences that come with longer day lengths — including increases is traffic accidents, heart attacks, workplace injuries, crime, and overall energy consumption — while improving residents’ quality of life during dark fall and winter months.   Opponents of Daylight Saving Time contend that its negative side effects were made even more damaging in 2005 when President George W. Bush signed the Energy Policy Act of 2005, part of which extended the annual duration of Daylight Saving Time by four weeks. Arizona Since 1968, most of Arizona  has not observed Daylight Saving Time. The Arizona legislature reasoned that the desert state already gets enough year-round sunshine and the reduction in temperatures during waking hours justifies opting out of DST by reducing energy costs and conserving natural resources devoted to power generation. While most of Arizona does not observe Daylight Saving Time, the 27,000 square mile Navajo Nation, which covers a large swath of the northeastern corner of the state, still â€Å"springs ahead and falls back† every year, because parts of it extend into Utah and New Mexico, which still use Daylight Saving Time. Hawaii Hawaii opted out of the Uniform Time Act in 1967. Hawaii’s proximity to the equator makes Daylight Saving Time unnecessary since the sun rises and sets on Hawaii around the same time each day. Based on the same equatorial location as Hawaii, Daylight Saving Time is not observed in the U.S. territories of Puerto Rico, Guam, American Samoa and the U.S. Virgin Islands.. Updated by Robert Longley