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Letter on Subsidizing to Attract

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Mr. Smith, has fallen behind on his work, he has asked you to help prepare a letter for a local business/economic project. Your local city is trying to attract a new garbage processing facility in an underdeveloped part of town. As part of the package of incentives for luring the facility's builders, the city is offering an economic subsidy of $300,000 to help build the facility. Mr. smith also explains that your help on this business/economic project will only help you in your promotion to vice president.

in which you either to support or criticize the proposed $300,000 subsidy.

* Define subsidy.
* Identify the economic winners and losers of the $300,000 subsidy.
* Explain what your city will have to give up because of the subsidy and what it will gain in the long run.
* Discuss the pros and cons of the project.
* Conclude your letter by expressing your point of view.
* Propose another recommendation/incentive that will help the community agree on the above project.

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Solution Preview

* Define subsidy.
Subsidy is a form of financial assistance offered to a business or economic sector that has the objective of benefiting the people. This is a government assistance to pay for items that are in people's interest but cannot be supported by the economy.
* Identify the economic winners and losers of the $300,000 subsidy.
Economic winners of $300,00 subsidy are the firm that takes up the garbage processing facility, and residents of the underdeveloped part of the city. The economic losers of the $300,000 subsidy are the local city which has to make the $300,000 subsidy and the taxpayers whose money has financed the $300,000 subsidy.
* Explain what your city will have to give up ...

Solution Summary

This solution defines subsidy, identifies economics winners and losers of a given situation, explains the short-term loss and long-term gain of the decision, discusses pros and cons and expresses a personal point of view on a city's plan to subsidize a facility in order to attract a new garbage disposal team. 472 words with 3 references.

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QUESTIONS AND ANSWER

Your local city is trying to attract a new NASCAR race track. As part of the package of incentives for luring the facility's builders, the city is offering an economic subsidy of $500,000 to help build the track. You are writing a letter to the editor of your local paper either supporting or criticizing the proposed $500,000 subsidy. In your letter, address the following questions:

* What is a subsidy?
* Identify the economic winners and losers of the $500,000 subsidy.
* Explain what your city will have to give up because of the subsidy. What will it gain?
* Conclude your letter by expressing your point of view.

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