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Los Angeles, Orange County, CA June 3, 2008 Election
Smart Voter

Ethanol Subsidies

By Ronald R. St John

Candidate for United States Representative; District 46; Republican Party

This information is provided by the candidate
The world food crisis is creating dramatic evidence of why centralized government economic planning is a bad idea.
The Energy Policy Act of 2005 increased subsidies for the production of ethanol and set ambitious production mandates. The hope of this government intervention was that it would help make our country less dependent on imported crude oil, and that it would reduce carbon emissions by encouraging a less-polluting form of energy production.

The predictable effect of diverting so much corn from the food market is a dramatic increase in the price of corn. Corn has tripled since the 2005 Act, and other grain prices have increased as well. Meanwhile, with few vehicles using ethanol as fuel the environmental benefit of the subsidies and production mandates barely registers.

When ethanol is truly a more efficient means of producing energy, then the market will produce ethanol without any subsidies or pronouncements from the government. If the production requires subsidies, then it is not yet efficient. In this example, trying to play politics with the economy is literally creating a humanitarian crisis with a threat of famine and political unrest.

With the failure of socialism in Russia, we already have examples of why central planning does not work as well as the free market. With the current food crisis brought on by the ill-advised ethanol subsidies we have an immediate and vivid example of what can go wrong when politicians abuse the spending/borrowing power of Congress to manipulate the market. We need to repeal the ethanol subsidies and production mandates on an emergency basis, and use this as a teaching tool for the hazards of government intervention in the economy.

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ca/state Created from information supplied by the candidate: May 5, 2008 15:18
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