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I see mostly reasoned arguments here although I don't believe we have quite yet come to a resolution.  Nevertheless, it has been a multifaceted discussion.  The question of whether the ethanol bubble will burst raises the question of what would cause it to burst.  Government subsidies don't easily end because they represent an expansion of government, which is in the government's self interest.  So subsidies have inertia.  Therefore I don't expect that there will be an ending of subsidy which will burst the ethanol bubble.  A far greater threat to the bubble is the unforeseen consequence of shorting the food supply in favor of ethanol.If ethanol production is forcing food prices up as much as many sources indicate, this will soon lead to a crisis exceeding the fuel crisis.  Even before the food price run-up, many families spent more for food than they did for fuel.  Soon, if not now, food will be rising in price faster than fuel.  Ethanol production is just in its infancy compared to what is proposed.  What will food cost 5-8 years from now when ethanol production has ramped up, and expanded many hundreds of percent?  That is easy to predict.  The government will treat itself to the administration of yet another wealth transfer subsidy.  This time it will be a federal bailout of the victims of high food prices.  Socialized food and socialized fuel will soon join socialized medicine as being the priority vectors of expanding the public sector.
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