This entry is in response to the question, "What are the positive and negative effects of subsidies?" posed by @newtonquach.
Subsidies can be an excellent tool in supporting economic growth, however they will become more of a crutch once they are used long term. An individual, business, or other organization may greatly benefit from the short term financial aid of a subsidy, as they could simply need the money to kickstart their company; there is nothing wrong with receiving temporary help in order to meet their company's needs and ultimately further develop the economy. The negative affects of subsidies come when those individuals, businesses, etc. are granted long term aid. Once subsidies become long term grants, the receiving party becomes too dependent on the aid, leading to increased governmental involvement in our economy. As Dr. Burt Folsom mentions in his speech to the Young America's Foundation, our country was founded upon regulating the amount of governmental control we will allow; I believe supporting long term subsidies encourages even more government involvement as the longer you rely on assistance, the more control it has over you. While the long term effects of subsidies may be harmful, I do believe short term subsidies have potential to assist in developing our nation's economy and will ultimately open many doors for our country's economical success.
Yes, short term subsidies would cause less distortion to markets and might plausibly result in a net benefit to society (especially if externalities are involved and the subsidies are only relied upon until the externalities are brought into the economic transactions).
However, has there ever been a short term government subsidy? History would suggest that subsidies take on a life of their own and are very hard to kill once they’ve been given life.