Exxon/Mobile profit soars

[TCO]

Originally posted by Kidicious


Look at the definition the Mad Monk provided. You have a negative connotation about subsidies which is preventing you from understanding the meaning of the word.

If I buy a newspaper am I subsidizing the paper? No. However, if I donate money to NPR. I am subsidizing them.

I don't care about Monk's definition. I care about the dictionary.

BTW: I didn't see anything "negative". That has nothing to do with the meaning of the word. This is purely a semantic discussion. And you are the one in the wrong.

[Kidlicious]

Originally posted by GP


If I buy a newspaper am I subsidizing the paper? No. However, if I donate money to NPR. I am subsidizing them.

I don't care about Monk's definition. I care about the dictionary.

BTW: I didn't see anything "negative". That has nothing to do with the meaning of the word. This is purely a semantic discussion. And you are the one in the wrong.

It's no big deal. Some people use the word one way and others use it another way. All government expenditures are benefits to the recipients though, even it there is an exchange at market price.

[Kidlicious]

It doesn't matter what the government expenditure is, if it benefits society equal to its cost then it's justified. Even if the expenditure involves a purchase for the market price it may not be justified if the benefit to society is not equal to the cost. That's why it really doesn't make any difference what term you use.

[The Mad Monk]

Originally posted by Kidicious


A payment by government, perhaps implicit, to the private sector in return for some activity that it wants to reward, encourage, or assist.

Here's the best definition I could find. I wish I had my old Public Finance text book. True, the government can encourage the production of a good or service by paying market price.

Originally posted by Kidicious
The way I understand the meaning of the term is an expenditure by the government to either alter the production of goods and services or the distribution of goods and services in the economy. Since all government expenditures do that, government expeditures and subsidies are one in the same.

There is a logical jump in there. In the definition you yourself provided, says that a subsidy is paid by a government when it wants to encourage a given activity. The fact that all government expenditures encourage certain activities does not necessarily imply that it wants to encourage those activities.

Creation and maintenance of the interstate highway system encourages smuggling of illegal goods, because it makes transport easier; would you say that implies that the government wants to encourage the smuggling of illegal goods?

In any case, it is not the definition that is being used in this thread.

[Sten Sture]

since we are just arguing semantics, and no one should be anti-semantic.

I do think that we all agree that for the US government to give Exxon a wad of cash for nothing would be a henious abrogation of it's obligation to the citizens of this country. And I would be of the position that this sort of outright graft is both not pervasive and not of a meaningful magnitude.



This dictionary listing makes Subsidy a gift, not the purchase of a necessary product.

subsidy

\Sub"si*dy\, n.; pl. Subsidies. [L. subsidium the troops stationed in reserve in the third line of battlem reserve, support, help, fr. subsidere to sit down, lie in wait: cf. F. subside. See Subside.] 1. Support; aid; co["o]peration; esp., extraordinary aid in money rendered to the sovereign or to a friendly power.

They advised the king to send speedy aids, and with much alacrity granted a great rate of subsidy. --Bacon.

Note: Subsidies were taxes, not immediately on on property, but on persons in respect of their reputed estates, after the nominal rate of 4s. the pound for lands, and 2s. 8d. for goods. --Blackstone.

2. Specifically: A sum of money paid by one sovereign or nation to another to purchase the co["o]peration or the neutrality of such sovereign or nation in war.

3. A grant from the government, from a municipal corporation, or the like, to a private person or company to assist the establishment or support of an enterprise deemed advantageous to the public; a subvention; as, a subsidy to the owners of a line of ocean steamships.

Syn: Tribute; grant.

Usage: Subsidy, Tribute. A subsidy is voluntary; a tribute is exacted.


Source: Webster's Revised Unabridged Dictionary, © 1996, 1998 MICRA, Inc.

[Kidlicious]

Originally posted by The Mad Monk
There is a logical jump in there. In the definition you yourself provided, says that a subsidy is paid by a government when it wants to encourage a given activity. The fact that all government expenditures encourage certain activities does not necessarily imply that it wants to encourage those activities.

The only other reason the government pays the subsidies is coruption. Obviously, a subsidy payed by coruption is a bad subsidy.

Originally posted by The Mad Monk
Creation and maintenance of the interstate highway system encourages smuggling of illegal goods, because it makes transport easier; would you say that implies that the government wants to encourage the smuggling of illegal goods?

Drug smuggling is a cost that is taken account when the decision is made by the political system to make the subsidy, since crime is not something the voters want to subsidies. But hopefully the overall benefit (use of the highways) of the subsidy will be more than the overall cost (crime+cost). If so then then the system works.

Originally posted by The Mad Monk
In any case, it is not the definition that is being used in this thread.

In reference to the question that was presented as to whether purchasing oil from Exxon is a subsidy?-Yes

[Kidlicious]

Originally posted by Sten Sture
A grant from the government, from a municipal corporation, or the like, to a private person or company to assist the establishment or support of an enterprise deemed advantageous to the public; a subvention; as, a subsidy to the owners of a line of ocean steamships.

All government expenditures are grants, because the beneficiaries are different from the providers.

[Adam Smith]

Subsidy. A payment made by the government (or possibly by private individuals) which forms a wedge between the price consumers pay and the costs incurred by producers, such that the price is less than marginal cost.

Dictionary of Modern Economics, p. 422.

Purchasing goods or services at market rates is not a subsidy. Case closed.

[DanS]

Well, shoot. Now what's there to talk about?

[TCO]

Originally posted by Adam Smith
Subsidy. A payment made by the government (or possibly by private individuals) which forms a wedge between the price consumers pay and the costs incurred by producers, such that the price is less than marginal cost.

Dictionary of Modern Economics, p. 422.

Purchasing goods or services at market rates is not a subsidy. Case closed.

Ooh, ooh, ooh! (Morton Downey, Jr. audience sounds)

[TCO]

Originally posted by DanS
Well, shoot. Now what's there to talk about?

How do we crack the OPEC cartel? I want 8 dollar a barrel oil.

[Sten Sture]

$8? That's easy - make OPEC think it is going to $45!

[Kidlicious]

Originally posted by Adam Smith
Subsidy. A payment made by the government (or possibly by private individuals) which forms a wedge between the price consumers pay and the costs incurred by producers, such that the price is less than marginal cost.

Dictionary of Modern Economics, p. 422.

Purchasing goods or services at market rates is not a subsidy. Case closed.

So income transfers aren't subsidies?

[TCO]

Originally posted by Sten Sture
$8? That's easy - make OPEC think it is going to $45!

I think the issue is more to fragment their ability to act cooperatively.

[Sten Sture]

Lets play a game.

Match the XOM cost with it's catagory - from 2002 10-K SEC report. Some catagories were excluded...

All figures in Millions US$

1) Operating expenses
2) Selling, general and administrative expenses
3) Depreciation and depletion
4) Interest expense
5) Excise taxes
6) Other taxes and duties
7) Income taxes
8) Operating income


A) 8,310
B) 22,040
C) 33,572
D) 398
E) 6,499
F) 17,831
G) 11,011
H) 12,356


No fair looking up the numbers.