Government cannot create jobs, wealth or prosperity. It simply can’t. The mere fact that the government can only exist by taking these things from the workers that produce them means that it must, by definition, be reducing the amount of these things in society. It is a one way street. Sure, the government might be able to do something that helps an economy on some level but they, by necessity, took the opportunity away from investors willing to privately fund a similar project. The net result then, at best, is zero.
This is true for virtually everything the government does for our “good”, including so-called “green energy” subsidization. The main problem with “green energy” (other than that, perhaps, the entire premise is flawed), is that it’s expensive because the technology doesn’t exist to do much of what we need to do to create clean energy. This leads to never ending government subsidies which create an entire new set of problems while putting a squeeze on taxpayers.
The government cannot legislate that technology exist. That’s a ridiculous notion. And by subsidizing anyone and everyone that comes along with a hair-brained “green energy” scheme, the government takes away the incentive for energy innovators and entrepreneurs to become wealthy with successful “green energy” endeavors. It’s simple logic.
Spain and Germany have learned the hard way that “green energy”, while it sounds good, is expensive. After years of being heralded as pioneers in clean energy production, both governments are looking for ways to decrease their involvement in it.
From Zero Hedge:
Over ten years ago, when Europe was a bright and shining example of experimental monetarist “brilliance”, and when the money was flowing, the continent decided to do the ethical thing and actively promote the pursuit and development of renewable energy through countless government subsidies. As a result, Germany and Spain became the undisputed leaders in the race for a green future, and both created similar laws to encourage the development of renewable energy. There were two problems: i) green energy, while noble in theory, is about the worst idea possible when it comes to profitability and capital self-sustainability and constantly needs governmental subsidies, and ii) it was the end consumers who would pay for the government’s generosity, in the form of a surcharge on electric bills. In Germany, for example, as the industry grew (in size, and thus in losses) demand for the subsidy increased, driving the surcharge higher. In January, the surcharge, which amounts to about 14% of electricity prices, nearly doubled to 5.28 euro cents per kilowatt hour.
I don’t want to be misunderstood as thinking that I don’t support alternative forms of energy. We should be (and, quite frankly, need to be) exploring and experimenting with all sorts of new energy technology. The problem (as usual) arises when the government tries to “help”. It should be left to innovative citizens and companies to pursue new technology.