People complain about subsidies to industries they don't like, but they are mute when it comes to subsidies they do like.
Republicans made a big fuss about the federal loan to Solyndra, which is in bankruptcy. But we hear little from Republicans about the subsidies to nuclear energy, including where to store the waste. Some Democrats decry the subsidies to the oil and gas industries. But we hear little from them about the subsidies to public transportation.
The real question about subsidies is do they advance the common good or do they advance some private gain. The general answer is a little bit of both. The trick is to have subsidies that really advance the common good and that have private gain as a small by-product.
An example of proper balance between common good and private gain is fire departments. The common good is to have people and equipment ready to contain fires and hazardous materials spills. The private gain is to the manufacturers of all the equipment that a fully-prepared fire department needs.
I was reminded of this problem by "Northstar cuts fares by as much as 25% to lure more riders", Pat Doyle, Star Tribune, 2012-07-05/06.
For a variety of reasons, ridership on Northstar commuter rail between Big Lake and Minneapolis has been declining. The costs of the Northstar are 80% subsidized by government. Certain people will jump on this and say it should pay its own way.
However, some of these same people will jump in their cars and never think of all the subsidies that make driving a car "economical". First, it is local government subsidies that pay for the streets in front of their houses from the construction to snow plowing and much in between. Second, county, state, and federal governments pay for all the highways that connect neighborhoods with business districts and with other cities. The state and federal gas taxes pay for only a small portion of these costs. On top of this is the enforcement of traffic laws and the investigation and cleanup of crashes.
The "pay its own way" people don't realize that they derive benefit from public transportation. Just think, when a subsidized bus with 25 passengers passes on the shoulder all these drivers stuck in a jam, it is carrying 25 people who would have made the jam even worse if they had driven instead of taking the bus.
Another subsidy of the highway system that few think about is the removal from the tax rolls of private property. Whole neighborhoods have been destroyed to make way for six lanes, no, now we need eight, oops ten lanes to accommodate people who live farther and farther out. Some of these people have been forced to move farther out because their homes were in the path of the highway. I think of the lost property tax every time I enter the vast expanse of the 35E/694 interchange in the Twin Cities area. One could put a small city in that space.
And the final subsidy of the highway system is the protection of oil availability. People will argue around and around about whether wars were fought solely to protect oil sources, but we would still need a navy of some size to keep the shipping lanes open and safe. Ever hear of Somalian pirates?
