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Government Sugar Policy: Buy High, Sell Low?
Posted By Bryan Riley On March 23, 2013 @ 9:00 am In Economics | Comments Disabled
It was recently reported  that the federal government is considering buying 400,000 tons of sugar to prop up prices for sugar producers. The government would then sell the sugar at a loss of 10 cents per pound, costing taxpayers $80 million.
Conventional wisdom for investors is “buy low, sell high.” The government proposes taking the opposite approach, buying sugar at an artificially high price and selling it at a loss. With this type of economic policy, is it any surprise the government is running deficits as far as the eye can see?
The government guarantees  a minimum price for sugar processers and inflates U.S. prices by restricting sugar imports. This type of crony capitalism  rewards industries based on who has the most powerful lobbyists, and it undermines our country’s economic freedom .
Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2013/03/23/government-sugar-policy-buy-high-sell-low/
URLs in this post:
 Image: http://blog.heritage.org/wp-content/uploads/sugar-spoon.jpg
 reported: http://online.wsj.com/article/SB10001424127887324096404578356740206766164.html
 guarantees: http://www.ers.usda.gov/topics/crops/sugar-sweeteners/policy.aspx#price
 crony capitalism: http://blog.heritage.org/2012/04/22/chart-of-the-week-crony-capitalism-leads-to-higher-sugar-prices/
 economic freedom: http://www.heritage.org/index
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