Delta Pilots End Era of Luxurious Pay

On Sat, 13 Nov 2004 22:19:30 -0500, nobody <nobody@nobody.org> wrote:

[ Snip ]

>When you start a business, if your credit history isn't good enough, you get a
>co-signer whose credit history gives the bank the necessary nudge to approve
>the loan. The co signer doesn't dish out any money. Is this a subsidy ?
>
>The subsidy occurs if the co-signer has to dish out money because you can't
>fulfill your obligations. Until that happens, no subsidy has occured.

In this case, the government backing meant that the risk to the lender
was reduced (actually, eliminated), so the lender lends at (say) 6%
instead of 24%.

That's the subsidy: the difference in what they had to pay for the
money, versus what unbacked loan would have cost.

Malc.

Malcolm Weir wrote:
> In this case, the government backing meant that the risk to the lender
> was reduced (actually, eliminated), so the lender lends at (say) 6%
> instead of 24%.
>
> That's the subsidy: the difference in what they had to pay for the
> money, versus what unbacked loan would have cost.

Semantics.

Is a subsidy some amount actually disbursed by a government (or a direct
revenu loss due to a tax breaks), or is it just the signature of a piece of
paper that gives a company a competitive edge ? Or both ?

If a government provides an environment that fosters creation and expansion of
enterprises, is that a subsidy or just a government doing a good job ?

If a governmnmet helps a corporation sign a better deal with the greedy banks
by assuming some of the risks, it is definitely "help". But is it a subsidy ?
No money gets exchanged.

If a government puts in a bankrupcy law that helps companies weather a bad
storm is that a subsidy ?