With the hotel deal recently passed, and water subsidies coming up as an issue, I think it is useful to discuss the core issue in each of these controversies: government subsidies.  Proponents of subsidies maintain that government can promote growth or socially beneficial  projects through government funds.  Critics of subsidies question the usefulness of giving taxpayer dollars to private businesses or the process of choosing the winners and losers in business competition.

Ultimately, though, both sides of the subsidy debate agree that the purpose of subsidies is to manipulate the market to conform to the designs of planning officials in either the local, state, or federal government.  And it is in this that the true problem with subsidies resides.  When government decides which businesses are successful and which fail, that choice is taken out of the hands of regular citizens.  When the man on the street walks into a McDonalds, or a Walmart, or a Starbucks, by purchasing their product this person is casting a vote for that venue to remain and/or expand.  Subsidies take this choice away from the vast majority of people and put it into the hands of a few officials or city staff.

In addition to this, by determining the success of certain businesses at the expense of others, government perverts the supply of goods and services so that this supply no longer matches the real demand for goods and services.  Some businesses succeed that should not succeed, and others cannot provide services that people really want.  This system of subsidies then becomes entrenched and calcified, as the end to the subsidies means the failure of these businesses and, en masse, an economic recession.  Whether government is manipulating the local farm industry or interest rates and monetary policy at the federal level, subsidies can cause significant problems to our country's economic well-being.

The following is a useful video that explains the issues at stake much better than I ever could: