Just read a bit about the massive subsidies the fossil fuels industry receives in the U.S and I was confused. Aren’t these companies one of the most profitable ones in the U.S?
In: Economics
So you’ve got a lot of good answers. My explanation is they convinced congress back in the day that they needed the subsidies to survive.
They grew into behemoths who no longer need the subsidies, but to remove them is to cause chaos in the markets they a service and they get to make higher profits at the same time. Removing subsidies immediately means gad companies had to reprice their products in an upward direction. Which means everything pil and petrol related goes up in cost which means consumers get very unhappy.
So they don’t want to remove it and voters will go ape if gas prices go up since they’ve been uses to low prices essentially their entire lives. So no politician is interested in fixing it cause they will be voted out. A campaign of awareness must be done as well as many voters aren’t even aware that the government is spending money effectively to reduce their gas price, which is enriching oil companies.
This issue is like many others(and it’s not just gas subsidies, corn hasn’t needed subsidies for ages nor have a lot of farmers) – the budget deficit is very similar in that we need to probably fix it at some point, but to fix it means raising taxes or lowering government spending dramatically and both of those things are incredibly unpopular with most voters so it won’t happen till it gets so bad people care en mass.
Generally if it costs money with no actual gain, aka to fix a problem, then it won’t happen cause the PR cost of looking bad on the economy is all you get out of it as a politician. Climate change is going down a very similar path.
Latest Answers