Greater Greater Washington

Stop distorting the cost of living with anti-urban subsidies

From rural air service to military base sitings to post office closings, many federal policies pick winners and losers among places for people to live. Exurban communities require much more expensive infrastructure, yet policymakers cling to a system that rewards building or living on cheap land but has the government subsidizing all the other associated costs.


Photo by Global Jet on Flickr.

The Federal Aviation Administration has been shut down since Saturday. Planes are still flying but employees in DC are furloughed and capital improvement projects at airports are frozen.

The shutdown stems from an impasse between the House and Senate over reauthorizing the FAA. Sticking points include union organizing rights at airlines, long-distance flights at National Airport, and a rural air subsidy called the Essential Air Service (EAS), which Republicans want to substantially scale back.

The Wall Street Journal recounts one example of a crazy EAS subsidy: service from Hagerstown, Maryland to Baltimore. The $59 flight, which costs $191 in subsidy per passenger, lets people fly for 40 minutes instead of driving for 80 minutes.

The Journal quotes one visitor who liked the service because it let him avoid taking a bus, "and I'm not into buses," he said. That's not a great reason to subsidize a flight. And the airport director says he doubts losing the flight would really affect Hagerstown all that much.

Nevertheless, Senator Barbara Mikulski is fighting to keep the flight, saying it would hurt the economy and cost jobs. That may be true, but keeping it also creates a drain on the economy and costs jobs elsewhere. Republican Senators have fought for similar exemptions in the past, too.

But there's a larger problem. Democrats and Republicans alike generally operate on a belief that people should be able to live where they want yet face no consequences for their choices, with the exception of housing prices.

We subsidize rural air service, build expensive roads and power lines to accommodate more housing in far-flung areas, tax telecommunications to pay for rural broadband, and maintain a flat rate to mail a letter anywhere in the nation. When people live in areas with high risk of natural disaster, states step in to provide insurance if private companies are unwilling.

Land is cheaper in areas more distant from jobs because the land is more distant from jobs. That makes housing cheaper (and some government subsidies make it cheaper still). But infrastructure costs much more to provide, creating huge long-term burdens for states which find they can barely afford to keep up all the roads and other kinds of infrastructure they have, let alone build more.

That means government is mostly letting the market dictate the cost of housing, but not letting it dictate the cost of providing various services to that housing. This distorts the incentives.

When government officials look for cuts, like many families, they often focus most on the immediate real estate costs instead of the infrastructure impacts. The Department of Defense did that with BRAC, moving jobs to cheaper locations in Fort Meade and Fort Belvoir while imposing enormous infrastructure burdens on Maryland and Virginia. Congress and the administration might push for something similar for civilian workers, choosing locations where there's cheaper land instead of maximizing public infrastructure.

The Post Office is looking to close 3,700 post offices around the nation. Some are small rural ones that see very little usage, and could be replaced by a single clerk working out of the town's library or a store. That makes a lot of sense. But some are charging that the list targets more urban offices than suburban ones. They're closing one in downtown Silver Spring and leaving one a bit farther away, for instance. Yet urban residents are more likely to be walking or taking transit to post offices, and at least in my experience, lines are already longer in urban locations than their suburban counterparts.

The Post Office hasn't released details of their calculations, other than saying that they're evaluating each location based on its revenue, the number of hours workers spend there, and its distance from other post offices. If it's picking urban post offices to close just because they're geographically close to others, that's just downright foolish since urban areas have more people. If they're picking urban ones because land costs are higher, that ignores the infrastructure impacts of their choice by forcing more driving, saving money for the Post Office but dumping added costs onto localities.

With pressure from Congressional Republicans to find budget cuts, Democrats could point to the many programs that bias settlement patterns in ways that cost more in the long run and hurt our metropolitan areas. Instead, many instead are just digging in to preserve those programs. That's because voters in those areas don't want the government money to stop flowing to exurbs and rural areas.

That will only stop when voters in the more populous cities and inner suburbs insist on an end to the silly public policy that the price of land should be set by the market, but the price of most other services somehow has to be equal for everyone, no matter where they live and what the cost.

David Alpert is the founder and editor-in-chief of Greater Greater Washington. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He now lives with his wife and daughter in Dupont Circle. 

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Ehhhhhhh. On the one hand, I get the point you're making, but on the other hand there's a bunch of history you're glossing over that explains WHY we subsidize the big empty parts of our country. If the US had had this attitude in the 1930s, there would be a large chunk of people in the Southeast who would be using outhouses today. This is a wrong thing, and it's wrong to say, "your family has lived in Nebraska for a hundred years and wants high speed internet so they can live a more efficient life as small farmers? Or your kid who needs internet to get an edge so s/he can become the only pediatrician in town? Well, that might subsidize some jerk from Omaha who wants to commute that far, so NO GOOD INTERNET FOR YOU!"

But like I say, I get your point that the policy isn't there so that jerks can turn open country into bedroom communities that steal the benefits of cities, avoid the costs, and impact the environment negatively due to increased car exhaust, polluted watersheds, and just a destruction of green acreage so some rich jerk can have a 3000 sq. foot house for half the price of the city he's exploiting.

by Jen on Jul 29, 2011 10:25 am • linkreport

the list targets more urban [post] offices than suburban ones. They're closing one in downtown Silver Spring and leaving one a bit farther away, for instance.
I think the list is just post offices that are being studied for potential closing. I don't think it represents a firm decision to close those offices.

by Gavin on Jul 29, 2011 10:33 am • linkreport

One of the main problems here is that the Senate, which holds about half of the federal legislative power, overwhelmingly represents rural areas. It's even worse in state legislatures, where they aren't really divided up by population at all.

Anyway, I largely agree with you, but there are the issues of agriculture and manufacturing. Both require large swaths of land that must remain cheap in order to keep prices for the products low. Of course, on the other hand, if we paid the real cost for food, we'd probably eat a hell of a lot better, since meat is so resource-intensive to make.

Much of what we're used to today in American culture is due to the subsidies we've given to rural America since the 1930s: cheap food, cheap goods, cheap travel, cheap suburbs and exurbs, etc. It would drastically change our culture to scale back these subsidies. Would it be for the better? Maybe. But it'd still be a huge change.

by Tim on Jul 29, 2011 10:34 am • linkreport

@Gavin, my understanding is that not only is the Silver Spring closing already a done deal, but the land is already spoken for:
http://www.bizjournals.com/washington/print-edition/2011/05/06/insight-has-silver-spring-post-office.html

by jag on Jul 29, 2011 10:36 am • linkreport

I'm going to echo Jen. I agree in principle, but are these rural airport subsidies really a contributor to sprawl of the kind that causes increased traffic?

I suspect that if Hagerstown ever got built up to the point that it became a real exurb, these FAA subsidies (if they're allowed to continue existing) would go away. As it is, Hagerstown is pretty much a remote, relatively isolated corner of Maryland.

by JustMe on Jul 29, 2011 10:38 am • linkreport

The reason these subsidies exist is politics that are incomprehensible to me. Democrats provide all these subsidies for rural people who generally vote Republican. Then, those Republicans turn around and blame Democrats for all the government spending.

The only reason I can possibly find for these politics is that Democrats are stuck in a past from 50 years ago when rural people and Southerners voted Democrat.

by Falls Church on Jul 29, 2011 10:38 am • linkreport

It's even worse in state legislatures, where they aren't really divided up by population at all.

This is not true. State legislatures are constitutionally required to be apportioned on a one-man, one-vote basis, from the Supreme Court case Reynolds v. Sims. The Senate has the only carved-out exception to this rule because of the specific provision in the Constitution for that.

by JustMe on Jul 29, 2011 10:40 am • linkreport

With food, we could start by just not specifically subsidizing corn.

More broadly, it's true that taking away subsidies that distort the market would cause some temporary disruption. It doesn't have to all be done instantly; we can scale them back over time.

by David Alpert on Jul 29, 2011 10:41 am • linkreport

@Tim -- "It's even worse in state legislatures, where they aren't really divided up by population at all." That's something of an exaggeration. While state legislative districts aren't required to be exactly equal the way U.S. House districts are, they do need to be within a fairly low band -- in New York it's 5 percent, I believe. Not perfect but a whole separate order of magnitude from the situation before the Supreme Court's one-man one-vote decisions from the mid-20th century, in which many state legislatures had disparities as great or greater than we have in the U.S. Senate.

by jfruh on Jul 29, 2011 10:43 am • linkreport

I stand corrected on state legislatures. I thought that the Supreme Court had only ruled on the federal House.

by Tim on Jul 29, 2011 10:47 am • linkreport

@JustMe

The real problem with EAS subsidies like Hagerstown is that once you factor in the connection time, you have completely erased the time advantage of flying. 90 minutes is not too far to ask someone to drive to an airport. Especially considering the fact that these flights have almost nobody on them, because rational people would rather deal with driving to a big city rather than get on a puddle-jumper.

As for "rargh rural subsidies" I think you have to make a distinction between building office parks and suburban housing in exurbs for people to commute to cities, and real RURAL areas. Those indirect subsidies allow places to exist that grow your food, and are the places you take your family on vacation, etc. The vast majority of people who live in these places have jobs where they directly provide a service/support for the other people in the community.

The reality is that people aren't flocking to move to these middle of nowhere places. People are moving to rural open areas adjacent to big cities so they can commute to the city every day. That's the real problem.

by MLD on Jul 29, 2011 10:49 am • linkreport

Also, you want to talk about stupid postal service behavior? The town I grew up in (population ~1500) originally shared a post office with the neighboring town (population ~2000). The towns basically share a downtown so it all worked well. Then at one point when I was a kid, they build a post office in our town and split them apart. It made no sense.

by MLD on Jul 29, 2011 10:58 am • linkreport

Wow. I just spilled my iced coffee everywhere. Dave Alpert advocating driving? What the hell happened? Heat cooked his brain?

I read somewhere that the cost of the shutdown (in lost taxes) is now larger than the EAS subsidy. Somewhere around 160 million.

Let's be clear -- that's what we spend in DC subsidizing moving people around in MetroAccess. And that's another subsidy worth killing.

by charlie on Jul 29, 2011 10:59 am • linkreport

This is a fabulous piece that hits the nail on the head. Our country wants to "let the market decide" certain things but then turns around and subsidizes and price controls others. And I don't think David is saying rural areas shouldn't have those amenities, just that they should pay their fare share for them.

by Alex on Jul 29, 2011 11:00 am • linkreport

@Tim:

If we paid for the real cost of food, I'm not so sure we'd eat a hell of a lot better. Real food, healthy food is really expensive. Mass-produced food like items are cheap. It's a large factor in the nation's health problems. Also, I'd choose a grilled chicken breast over a bag of Fritos for my healthy pick any day of the week, so it's not ALL meat's fault.

by Catherine on Jul 29, 2011 11:03 am • linkreport

Hmmm, as an aviation buff and an advocate for proper public transit funding, I feel like I have to defend the EAS subsidies. Keep in mind that more than half of the subsidies go to Alaska where there is no other viable form of transportation most of the year. I don't see why they don't deserve connections to the rest of the US, similar to why I don't see why we can't expand public transit to the suburbs, even if it results in a net loss financially.

That being said, I was unaware that the Hagerstown subsidy still existed. A lot of the subsidies should probably be removed if people have reasonable access to other local airports.

by Max on Jul 29, 2011 11:03 am • linkreport

I think that when you live in Greater Washington, it's easy to forget that there are real actual rural places (as opposed to places that are future subdivisions).

And I think it's possible to disagree with a specific subsidy -- for example, as in the case of the flight from Hagerstown to Baltimore, it may not be something that I really do want to subsidize. Or it may be something that I do want to subsidize, but the current subsidy is not the best way to go about it, or the cost may outweigh the benefit.

But I'm not comfortable telling people who have been living in those places that, on principle, if they want to have basic aspects of modern life like high-speed internet access, or transportation, or electricity, they can move. Just as I'm not comfortable telling people on principle that I don't want to subsidize their health care costs if they choose to do unhealthy things, or their rebuilding costs if they choose to live somewhere where there are natural disasters, or their food and housing costs if they made imprudent life choices. As a society, we're all in this together.

by Miriam on Jul 29, 2011 11:06 am • linkreport

Yikes, it looks like I was wrong about HALF of all EAS subsidies going to Alaska. Still, Alaska receives much more in EAS subsidies than any other state. http://en.wikipedia.org/wiki/Essential_Air_Service

by Max on Jul 29, 2011 11:06 am • linkreport

"Keep in mind that more than half of the subsidies go to Alaska where there is no other viable form of transportation most of the year."

This is the same Alaska where each resident receives a PFD in October of each year, right? Perhaps they could use that to subsidize their travel?

by dcd on Jul 29, 2011 11:11 am • linkreport

@Max Alaska certainly does have the most subsidy, but according to the wikipedia link, NE is not far behind at $11,368,343 (vs $12,631,188 for Alaska)

by Ryan D on Jul 29, 2011 11:21 am • linkreport

Rural Post Offices and air subsides are small time Federal policies/expenditures. The granddaddy of land use distorting federal policies in the mortgage interest tax deduction.

Rental housing tends to be urban. Image how the contours development if there was a level playing field for renting versus owning.

by Barney on Jul 29, 2011 11:22 am • linkreport

Keep in mind that more than half of the subsidies go to Alaska where there is no other viable form of transportation most of the year. I don't see why they don't deserve connections to the rest of the US

If it's not economically viable to populate some parts of Alaska, then it should be left as wilderness or it can be exploited in other, more economically viable ways. As a pedagogical example, we shouldn't subsidize transportation to the moon just so people can live there. If it's not economically viable to inhabit the moon, we should leave it alone.

by Falls Church on Jul 29, 2011 11:25 am • linkreport

In other ways the federal government subsidies cites over rural areas.

How much is a section 8 voucher worth in DC versus a voucher in rural WV?

What is the value of the federal mortgage interest deduction on a house in DC versus a house of similar size in rural Maryland?

That said, I am not a supporter of subsidizing either rural or urban areas and also think that the cost of environmental impact included in the any cost calculation.
The EAS subsidies do need to be cut.

Some things such as rural broadband service I see as an essential service like schools and should be available everywhere in the US.

by Bruce on Jul 29, 2011 11:36 am • linkreport

When you have a monopoly and cannot make money chances are you don't know how to run a business. Never more true here than by the inept unionized postal service.

Let's be clear here...these proposed post office closures are a result of scandalous pension costs and gross mismanagement by postal unions.

They are, like most unionized entities, burdened by too much management doing essentially nothing but getting paychecks...while they let the post office facilities and their main responsibility (mail delivery) suffer. It's a shame anyone will lose a local post office thanks to unionized mismanagement...but no-one is really being honest about it with the American taxpayer...least of all the pro-union national media.

by Pelham1861 on Jul 29, 2011 11:36 am • linkreport

If it's not economically viable to populate some parts of Alaska, then it should be left as wilderness or it can be exploited in other, more economically viable ways.

But without those subsidies, it's not that it would become wilderness. It's that the residents would remain but their standard of living would decline to levels we consider unacceptable. I suspect Alaska is basically a special case here.

The point, much like the post office, is it "keep us all connected." Obviously there are alternatives with respect to the Hagerstown-Baltimore route, but in plenty of places in the USA, there aren't practical alternatives-- and the residents of those places were there "first" and get representation just like the rest of us.

by JustMe on Jul 29, 2011 11:56 am • linkreport

The post office in Del Ray in Alexandria is among those on the list. I can't say that I would miss it terribly, but I'm sure others would. I guess my issue is that the site is a corner site in a multistory building, and it seems underutilized. I don't know if the p.o. owns or leases the bldg. In any case, such a good site with sidewalk frontage, and parking and loading in back could be more productively used for other thing that generate activity, both social and economic. I think having P.O. services on Mt. Vernon is important, but I'm not at all opposed to those services being co-located with private businesses or with other public services.

by spookiness on Jul 29, 2011 12:09 pm • linkreport

When you have a monopoly and cannot make money chances are you don't know how to run a business. Never more true here than by the inept unionized postal service.

Ah, yes. The bold Captain of Industry's critique. Is the problem of a quasi-governmental entity that it doesn't have bold Galtians who "know how to run a business"? Or is it that the rates the entity charges are artificially set by the government, while at the same time it's required to provide service to every podunk speck on the map?

I suppose Donald Trump might be able to square that circle, but who knows? As far as the critique that "pensions" are to blame, those were negotiated decades ago. Back when things like 401(k)s didn't exist. They were negotiated in lieu of salary. Did you want to go back in time and offer an investment plan instead?

Whether it's ill-informed blather about auto workers, or post office workers, these kind of "shake your fist and wish it weren't so" critiques from the Resentful Right never seem to make much sense, but there you go.

by oboe on Jul 29, 2011 12:10 pm • linkreport

If we want to cut subsidies there are other things that can be added to the list.

Any area that is not of a certain density and is not within a certain amount of miles of a major city should not be provided any of the following Water, Electricity, Waste Treatment, Phone Service, Interstate, Roads if you want these move to a urban area (not rural, not suburban) or otherwise pay for the direct cost it would be to build out the service to your property yourself.

And keeping with this if you live in a city your price for food should be based on the distance from the farm it came from to your city

by kk on Jul 29, 2011 12:56 pm • linkreport

When you have a monopoly and cannot make money chances are you don't know how to run a business. Never more true here than by the inept unionized postal service.

The Postal Service doesn't have a monopoly. It's competing with all package delivery services and all other forms of the transmission of written communication, like email. On top of that, it is legally barred from restructuring itself to meet market demands: it must be open Saturday, cannot raise rates faster than inflation, and cannot forgo delivery to a single address anywhere in the US. It's unsustainable, but that's where Congress has put it. Don't cry to the USPS, cry to your Republican members who demand the world for nothing from the organization.

by OctaviusIII on Jul 29, 2011 1:07 pm • linkreport

Infrastructure subsidies are important to our system of government. There are egregious examples in any system, but creating vibrant rural communities is important to their residents and the country at large. That will necessarily involve subsidies for health care, education, electricity and transportation.

On the broader issue of subsidies cuts, I propose a California solution: if the rural regions elect Republicans to cut government spending, then cut the subsidies that flow to rural areas. EAS is probably a good example of that. I don't want to cut this program, but if they do, who am I to argue?

by OctaviusIII on Jul 29, 2011 1:19 pm • linkreport

David, you need to correct your opener, it's a bit garbled. The FAA is not shut down. It has been accurately described as a partial shutdown. Employees on furlough are not confined to Washington. 4,000 FAA employees whose positions are funded out of the Aviation Trust Fund (via the ticket tax and related flight taxes) are the ones on furlough, regardless of where they work, though I do not doubt that many of those affected are here in DC, maybe even most. Many other FAA employees, even if they are not controllers, continue to work (for now--the next federal employment adventure would be the debt ceiling impasse).

http://tinyurl.com/3zd4dlt

The Essential Air Service program was part of the deal that permitted airline deregulation back around 1978. The idea was to subsidize a lifeline for citizens who otherwise would not have access to transportation.

This concept rings a bell somewhere but I can't quite place it.

by Chriscom on Jul 29, 2011 1:26 pm • linkreport

I usually try not to comment to say "I agree." But...Excellent post. Add in farm subsidies here, too.

by WRD on Jul 29, 2011 1:29 pm • linkreport

@OctaviusIII: +1

by 7r3y3r on Jul 29, 2011 1:29 pm • linkreport

i meant that with respect to the 1:07pm comment

by 7r3y3r on Jul 29, 2011 1:31 pm • linkreport

But without those subsidies, it's not that it would become wilderness. It's that the residents would remain but their standard of living would decline to levels we consider unacceptable. I suspect Alaska is basically a special case here.

I don't understand why they wouldn't move if there standard of living would be better elsewhere. We've seen exactly that happen in other places where opportunities or quality of life have been reduced and it makes sense to move. Detroit comes to mind and even DC was in that position just a couple decades ago.

creating vibrant rural communities is important to their residents and the country at large.

Why is it important to the country at large? If a way of life no longer makes sense, then let's get on with helping people make that shift rather continue to propogate an unsustainable existence through subsidies.

And keeping with this if you live in a city your price for food should be based on the distance from the farm it came from to your city

To the extent that it makes sense for the free market to price food based on the distance it travels (e.g., food is more expensive in Alaska and Hawaii), the free market does just that.

Any area that is not of a certain density and is not within a certain amount of miles of a major city should not be provided any of the following Water, Electricity, Waste Treatment, Phone Service, Interstate,

This is true only to some extent. Sometimes it's a good investment to build infrastructure in places like the close-in suburbs where commercial development is viable because the development pays for the infrastructure (commercial development is the key because businesses pay significantly more in local taxes than local governments spend providing them services).

by Falls Church on Jul 29, 2011 2:00 pm • linkreport

This post is wonderful!
When discussing removing these subsidies, I would add that one has to remove the control neighbors have over development. Past posts have mentioned it, but incumbent city landowners make it very difficult for cities to grow to accommodate these new people.
It is a daunting prospect for many to both lose a subsidy then move to an expensive city where current landowners can charge any price as new development is limited.

by MW on Jul 29, 2011 2:29 pm • linkreport

My comments above, and the response engendered, have nothing to do with wishing things were different...unionized postal workers were given absurdly high pensions...had far too many 'supervisory' employees and it bankrupted their operation. And note to the other reader above...they were not given pensions that could never be afforded in lieu of proper salaries...they were well paid also. But the issue is not the hard working folks at the USPS...its the inept and union mandated 'management'.

The USPS has never come to Congress and requested allowing some private enterprise help...or been willing to jettison packaging delivery to UPS, FEDEx and others. The unions would not allow it. So, they created their own problems.

It's sad and unfortunate as the local post office was/is a touchstone of many communities...and a bloated bureaucracy has killed it.

Unions killing jobs and making American life less pleasant...all out of greed Unfortunately for the workers...a day of reckoning is ahead for many such Federal subsidies.

The airport subsidies (the other issue here)simply cannot any longer be afforded.

by Pelham1861 on Jul 29, 2011 2:34 pm • linkreport

I'm with Jen on this. Some subsidies are worth keeping, as backward as they seem.

by andrew on Jul 29, 2011 2:42 pm • linkreport

I kinda have to laugh at the brash scoffing at the subsidies that AK gets here. When the rest of the country does that with DC, people here go boo boo big time.

Not to say no subsidies can be cut, but AK would seem a prime example of a place where little used airfield need some help. Just because air is the only way to get to some places. And you would not want people to die of medical emergencies, right?

As for USDA subsidies, they need to be reexamined. Big business does not need subsidies. Less money to corn (=ethanol, beef, HFCS) and more to fruit and veggies, so that a pound of strawberries becomes cheaper than a pound of beef is a good idea. Or just cut the corn stuff. That'll do the same.

by Jasper on Jul 29, 2011 3:07 pm • linkreport

I don't understand why they wouldn't move if there standard of living would be better elsewhere.

There are a great many things you do not understand about life.

by JustMe on Jul 29, 2011 3:12 pm • linkreport

@ Falls Church

Add the cost of Machinery, time, maintenance, power, water, disposing of animal waste safety, etc for the farm to food prices. How would people like it when Milk is $8 as the base price or corn for $5 to reflect the true cost.

So what are close in suburbs; since all of the counties have awkward shapes and borders. For example parts of PG and Montgomery County are further from DC than parts of Howard, Anne Arundel, or Fairfax County so where do you draw the line at.

If someone wants water, power, waste removal etc they should be for the service to their property with absolutely no type of subsidy or if the government offers this it should be at the true cost not a subsidized price.

Transportation

Cut all Amtrak routes except the following/build out Amtrak in following
Seattle to San Diego via I-5, Dallas to Atlanta via I-20, Miami to Boston via I-95, Cincinnati to Milwaukee via I-94, I-65 and I-74 any where else fly.

Highways and Interstates nothing that crosses or goes through a mountain, nothing in the desert, pretty much scrap every interstate that is between Idaho, Texas and Kansas only having them in the area immediate surrounding the major cities.

If you build your town/city surrounded by Mountains or in the middle of the desert there is no reason why someone should accomidate you by going through hell building a interstate, highway, railway service or roads connecting there.

Make Amtrak the primary way of travel along coast and Airlines the primary way of travel cross country.

Let Caterpillar, Stagecoach, FirstGroup etc handle building roads and creating transit system between cities/states

Government Agencies

Merge USPS, IRS, SSA (When you look at their functions, ways of doing their functions etc they could function as one agency) These are the three main agencies of the Federal Government people deal with on a regular basis.

1 IRS, SSA and USPS share buildings in cities/counties
2 Setup Pneumatic Tubes in cities for USPS
3 Put the USPS in control of the Automated Clearing House (keep them useful and this is a better extension of the USPS when looking at their history than the Federal Reserve)
4 Make all IRS, SSA payments and refunds via ACH
5 Create a secure digital counterpart to the postal service.

by kk on Jul 29, 2011 3:15 pm • linkreport

I would agree with Hagerstown example you gave but I think you are just cherry picking the worst example and trying to pretend its indicative of the entire program.

Small town air service is convenient. It allows people to connect to major airports without having to drive a long way. I come from IL and Bloomington, Springfield, and Peoria all have airports that serve Chicago, St. Louis, and Indianapolis as well as a few other cities.

It saves the cost of renting a car and a few hours of drive time flying into them and having a family member pick you up. But again that is a convenience issue.

What isn't talked about is that these flights often serve as access to better medical care, either on an emergency or non-emergency basis. Some of the more rural communities out west rely on their one or flights a day to a bigger city to get to specialists.

Should the argument be, "well if you want chemo then maybe you should move into the city or suburbs hillbilly!"?

Like most issues, this is more nuanced then the general public, or the Tea Party, pretend it is.

by Look beyond worst case scenario on Jul 29, 2011 3:46 pm • linkreport

You people didn't ever study your history very carefully. Urban-Rural resource battles have been the basis for revolutions since we began recording events. The founding of our country was *intended* to balance the needs of rural and urban populations, partly to avoid such debacles. They assumed that needs would be in direct conflict and that we would have to work out these competing interests and that we'd be stronger. We are.

It's the nature of things that each side thinks they're getting raw deal and that the other is taking advantage of them.

It's kind of ridiculous that anyone with a college education or who'd even paid attention in HS history would be treating this as some sort of a problem to be resolved. This is the basis for the government of our country, if you think it needs to be changed, then you're asking to scrap the constitution and have a revolution.

I'm pretty sure that's a not a mainstream idea.

by ahk on Jul 29, 2011 4:05 pm • linkreport

RE: Alaska subsidies. You are forgetting that much of the population of bush Alaska that relies of subsidized air service are native Alaskans (or people who provide them services like school teachers) who are living where they and their ancestors have lived since they first crossed the Bering land bridge. Would you advocate rounding them up and forcing them to live in public housing in Anchorage? How about reservations in the desert?

By the way, try getting specialist medical care in Point Hope without flying to Anchorage or Fairbanks. Try getting fresh produce into the local store in Barrow without flying it in from Washington state. But then again, I guess only us city folk are entitled to eat vegetables. Then again, try getting fresh produce in DC without using the taxpayer subsidized interstate highway system. If the First Lady wants lettuce in December she should move the White House to California!

Of course, most people in bush Alaska, or the entire state of Alaska, or the entire US for that matter will never fly into Dulles Airport and take the Metro into downtown DC. Yet their tax dollars will subsidize the construction and operation of the silver line. Most people in bush Alaska will never use a bike kiosk in DC, but will pay income tax which is used to partially subsidize that system (which probably would do quite well on its own).

One more thing. If you live in Alaska, or any other state, and get arrested and convicted of a felony, you are sent to a prison operated and paid for by your state government. In fact, corrections is a major part of most state budgets. But in DC, if you are convicted of a felony, you get sent to federal prison with the tab largely picked up by the taxpayers from the rest of the country, even people who dare to live in Akutan, Alaska or (gasp) Hagerstown, Maryland.

We can play this game all day, better yet, we can have a war over it. Oh wait we already did and the concept of a "nation" rather than a collection of separate areas won.

by 49thstater on Jul 29, 2011 4:12 pm • linkreport

I think the irony here is that if we just gave free rein to the far-right whack-jobs that the folks in the heavily-subsidized hinterlands keep sending to DC, a total collapse of rural America would be the end result.

These guys want to shrink the Federal government until it's small enough to drown in a bathtub. Once that's done, we just take the productive states of the nation--the enclaves of the bi-coastal elites--and form a loose confederacy to provide things like health care, etc...

In a system of loose federalism which the modern conservative movement keeps saying it wants, rural areas of the country would be doomed. And you can talk all you want about how produce would be more expensive, but that seems highly unlikely. Perhaps milk (and corn products) would be moderately more expensive, but everything else, the rural (and mostly conservative) states would be competing with other countries on the open market.

Heck, in a future confederacy of NY, MD, NJ, CA and a few others, maybe we'd start subsidizing fresh produce rather than nothing but corn and milk. Everyone wins.

by oboe on Jul 29, 2011 4:19 pm • linkreport

The founding of our country was *intended* to balance the needs of rural and urban populations, partly to avoid such debacles.

I'll assume you're talking about super-representation of rural interests in the Senate. While that's been the end result, the intention didn't really have anything to do with "rural interests" except in one peculiar particular: Slavery.

There were two non-negotiable clauses to the Consititution that the slaveholding states required: first, the fugitive slave clause, which required free states to return the slaves of slave states; and the "Great Compromise" which ensured that slave states would have equal representation even though they denied the franchise to the overwhelming number of their inhabitants.

As James Madison wrote in his notes, "the States were divided into different interests not by their difference of size, but by other circumstances; the most material of which resulted partly from climate, but principally from the effects of their having or not having slaves."

The American South: the gift that keeps on giving.

by oboe on Jul 29, 2011 4:34 pm • linkreport

Pelham, I'm not saying workforce reforms aren't necessary to USPS profitability (I'm not saying they are, either; I don't have the information to comment on that issue specifically). Rather, I'm saying that private enterprise competes with the USPS every day. As well, the various private package shipping companies have significantly more flexibility in their business operations, even going so far as to not deliver to especially remote addresses. (In that case, they send the package through USPS. Go figure.)

No, I wish things were different. I wish USPS were given the flexibility to become profitable. Contrary to your assertion, the USPS has come repeatedly before Congress to request permission to increase their prices and cut Saturday service. They've been denied every time. I wish USPS could concentrate on profitable services to support unprofitable services, but its hands are bound. Unions make a good bogeyman for anything that goes wrong in business, but I honestly cannot see them being a worse problem than laws that force an organization to do inherently unprofitable things.

by OctaviusIII on Jul 29, 2011 4:39 pm • linkreport

"I think the irony here is that if we just gave free rein to the far-right whack-jobs that the folks in the heavily-subsidized hinterlands keep sending to DC, a total collapse of rural America would be the end result."

In my wearier moments, I'm inclined to let them proceed down this path of destruction. But then I come to my senses, and continue to fight the good fight.

by dcd on Jul 29, 2011 4:39 pm • linkreport

@dcd,

It's like being spat at and cussed out by the drunk guy you're trying to fish out of a frozen lake.

by oboe on Jul 29, 2011 4:42 pm • linkreport

I wonder what the folks out in the heartland think about the subsidization 'city folks' are getting in terms of heavily subsidized rail and buses. It's not uncommon for some of these people to have to commute 100 miles round trip ... or even each way. I bet they'd love to have 'the government' give them subsidized metro too!

by Lance on Jul 29, 2011 4:57 pm • linkreport

@Lance

You've messed up your scales there. Sure, transit is subsidized. So are other city programs.

That doesn't change the fact that cities and metropolitan regions are net donors of tax dollars, and rural areas are net recipients.

by Alex B. on Jul 29, 2011 5:17 pm • linkreport

@Lance

I know some corn farmers you can ask. I know I have. They don't mind. They are making a lot more in subsidies than the average urban dweller.

by William on Jul 29, 2011 5:32 pm • linkreport

Alaska is a poor example. When any government locks up the vast majority of an areas resources it then assumes a certain burden of support (ask John Locke). The Alaska State Constitution rightly states that it's resources belong to it's residents, and they should get consideration for any and all monetization of it's resources accordingly. Of course what they receive is pittance from only one area of extraction. Alaska is essentially "locked up,"held in private reserve.

Alaska could and would be the most self sufficient and prosperous state if left to it's own (we certainly posses the natural resources to do it), but instead it is this nations private reserve that makes it feel wild and green. Just like any fine private reserve it costs a bit to maintain. Trust me when I say your getting off cheap.

by Jeremy Parker on Jul 29, 2011 6:01 pm • linkreport

@ kk:pretty much scrap every interstate that is between Idaho, Texas and Kansas only having them in the area immediate surrounding the major cities.

If you build your town/city surrounded by Mountains or in the middle of the desert there is no reason why someone should accomidate you by going through hell building a interstate, highway, railway service or roads connecting there.

And how are your California strawberries gonna get from California to your supermarket? How is your Texas BBQ gonna get to your favorite restaurant?

Interstates are aptly named. They are not there for local traffic - they are there for interstate traffic.

by Jasper on Jul 29, 2011 7:00 pm • linkreport

"Alaska could and would be the most self sufficient and prosperous state if left to it's own (we certainly posses the natural resources to do it), but instead it is this nations private reserve that makes it feel wild and green. Just like any fine private reserve it costs a bit to maintain. Trust me when I say your getting off cheap" Alaska's residents get very large annual royalty from the oil trust. Given the extreme climate and the cost of maintaining infrastructure in that climate, it's unlikely that Alaska would be self-sustaining in the way that Ohio (a state in relative net balance between tax income/outflow) would be; Ohio has a very mixed economy and the combination of rich soil, flat land and location relative to the rest of the populated country accounts for that. A big part of the Alaskan economy is based on its preservation and the tourism that it brings. It's always s funny to argue economics with libertarians, because they usually don't have the slightest idea how to even make use of their own assumptions.

by Rich on Jul 29, 2011 11:26 pm • linkreport

The Hagerstown example is meant to be somewhat ludicrous, except that I'd imagine that many of the customers come from even further away, from places like Meyersdale PA, Bedford PA, etc. that are even less tied into any public transport grid and that many are elderly (the population in rural areas, generally, skews old and PA is a relatively elderly state) and unlikely to be the best candidates for driving to Baltimore or having someone who can easily do it.

You'd really have to look at the totality of the subsidies to work out what is ludicrous and what isn't, and how one could prune excesses from say, Nebraska, without disenfranchising people in Nome. Picking something seemingly laughable (the usual right wing rhetorical trick) without walking through the big picture or even the full measure of the small picture is just lazy thinking and, in this case, a naive understanding of the region.

by Rich on Jul 29, 2011 11:34 pm • linkreport

I hate all those government subsidies, except for the ones I can't live without! You better not touch those.

by Ha on Jul 30, 2011 8:37 am • linkreport

David,

The arguments you use for ending EAS are the same arguments being used to end the heavily-subsidized long distance trains such as the Southwest Chief and the California Zephyr.

Do we really need to subsidize transportation between Provo, Utah and Ottumwa, Iowa, or should the market determine that?

I support the subsidy, but your anti-EAS argument says no.

by Mike S. on Jul 30, 2011 10:27 am • linkreport

Government subsidies are awful and cause all sorts of economic distortions and externalities.

Except mass transit subsidies.

And affordable housing subsidies.

And rent control.

And multi-generational social welfare programs.

And most other liberal spending and wealth-transfering programs.

by Fritz on Jul 30, 2011 1:58 pm • linkreport

@ Jasper

If something is not available where you are you either move to it or do without it this goes for everything. If a food can not be grown in your climate or region you don't need it.

You need water, air, shelter and food; those can be found locally and if you not you have bigger problems

by kk on Jul 30, 2011 11:07 pm • linkreport

Food subsidies keep food security. We don't think about food security because we have it. We may want to reform food subsidies and shift it to another crop, but we shouldn't seek getting rid of them.

by Hugo Estrada on Jul 31, 2011 10:25 am • linkreport

@Hugo

Exactly. Subsidies help keep the food supply plentiful and prices stable. Most of the subsidies go to crops that are produced on a massive scale, because they make their way into lots and lots of food products (and some other products). It's one thing for tomatoes to be in short supply- we don't eat a lot of them and they're relatively easy to either replace or simply not use. But, the impact would be far greater if corn, soybeans, wheat or even milk experienced shortages.

I'm not sure farm subsidies are implemented in the best way. You could probably have the same effect for less money, I suspect. But, I think it would be unwise to get rid of them all-together.

by Andy R on Jul 31, 2011 3:45 pm • linkreport

@Alex B.

I suspect that the tax system and the nature of big-budget products in rural areas, makes it difficult to gauge who (i.e. rural vs. urban residents) are really benefiting more per tax dollar. While there are property taxes, the majority of taxes (e.g., income, payroll, sales) are based on where people live. More people live in urban and suburban areas, so of course most of the revenue will come from there.

But, that doesn't mean that urban residents aren't benefiting from the projects done in rural areas. As others have said, roads in rural areas bring food and raw materials to cities. Major roads through rural areas let people in cities drive to vacation areas, or to grandma's house. And they let industries ship products out of manufacturing centers.

When it comes to road projects, people in truly rural areas often probably don't need the expensive roads built. If it was just them, they could probably deal with 2-lane roads just fine. It's because of the city folks that major highways get build in rural areas.

Of course, it's a little different when you're talking about other types of subsidies that rural areas get. Rural areas do get some subsidies to build up other types of infrastructure, like power or telecommunications lines. I don't know how those subsidies compare to urban areas on a tax revenue basis, but I'll just assume it's higher (which may or may not be true, since poor urban residents get subsidies too). In that case, I view the subsidies as a way to ensure access to a certain quality of life in rural areas, since we should recognize the value those areas bring to the rest of the country (you do like to eat, don't you?). I don't think you'd want a society where families that grow the food for the rest of the country have kids that are at a significant disadvantage.

I understand the sentiment that many on this website have against suburban areas. I think many go overboard, but I get it. But many comments on this article were quite anti-rural, which I was very surprised to see.

by Andy R on Jul 31, 2011 4:09 pm • linkreport

The FAA reauthorization battle is more about the labor issues which affect UPS and Fed Ex than the Essential Air Service subsidies. Congressman Mica only tried to remove 3 or 4 of the most egregious subsidies in the continental U.S. (i.e. no impact on Hawaii or Alaska)in the House version of the extension. Based on the debt-ceiling agreement that may pass today all of these kinds of subsidies will probably become toast anyway when the real line item cutting begins.

by steve strauss on Aug 1, 2011 9:40 am • linkreport

I wonder what the folks out in the heartland think about the subsidization 'city folks' are getting in terms of heavily subsidized rail and buses
Your know, every time some Republican tries to cut subsidies to Amtrak, it's fellow Republicans that keep it going. The senators from Mississippi, and other rural states, seem to recognize that whole communities in their states would be cut off if there was no rail service.

by lou on Aug 1, 2011 11:54 am • linkreport

Actually Alaska has more marketable natural resources than any other state and a very small population. That makes self sufficiency far more feasible than you would imagine. If those resources were properly utilized to hell with the tourists coming to see millions of acres of nothing and their gift shop money paying out of staters summer wages, and to hell with the over 50% of fishermen that live down South and spend their wages accordingly. And the same to the oil companies that manipulate both local politics and economies to suit their global agendas. We can do without rural broadband subsidies, but we cannot do without our natural resources! Without them we're relegated to the dole, with them $$$.

by Jeremy Parker on Aug 1, 2011 9:13 pm • linkreport

What @lou said:

http://motherjones.com/kevin-drum/2011/08/price-rural-life-0

If the nation's "conservatives" manage to gut federalism, we'll end up looking a lot like the Eurozone: with the bicoastal elites making up France and Germany, and the teabagger hotspots of the Cotton Belt looking increasingly like Greece.

by oboe on Aug 8, 2011 1:52 pm • linkreport

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