The push for renewable energy is nothing new, but still on many people’s minds.  Too often, the government decides to get involved.  The problem is that they often cause more harm than good.

Currently the government spends huge amounts of money on ethanol subsidies.  Their logic is, that if they incentivize farmers to produce corn for use as ethanol, then our dependence on oil will end.  There are a couple problems with their logic, however.

The government is spending a lot of money on this project.  This adds to our national debt, and disrupts the flow of the market.  None of this is beneficial.  In the government’s push for renewable energy, they have only added to the 14 trillion dollar deficit our country faces.  With a deficit this large, private sector investment decreases.  Decreasing investment means less money being put into reliable energy research.  Our dependence on foreign oil will never end if this continues.  Ethanol subsides need to be cut.

Additionally, this attributes to rising food prices.  When it suddenly becomes more profitable to produce corn for ethanol rather than food, farmers follow the money.  Generally, if something is more profitable it is because there is a demand for it. By following the demand, the farmer would simply be giving the public what it wants.  In this case, however, there is not overwhelming demand for ethanol.  Rather, it is a government created demand that is causing a misuse of supply.  With more corn going to ethanol production instead of food production, corn prices rise.  Corn is a common ingredient in many food products and the rising price contributes to food prices across the board being raised.

The government needs to cut ethanol subsides and let our farmers produce what the people demand.  Disrupting the economic flow is counterproductive, and this needs to be changed.