There Is No Right Way To Manage a Subsidy

Randall O’Toole, The Antiplanner (26 April 2011):

The second problem with life-cycle budgeting is that its advocates want some sort of federal law imposing it on transportation agencies. … Just what those agencies need: more red tape consuming scarce transportation dollars and delaying needed transportation projects.

The real problem with federal transportation spending is that Congress has split federal funds into 40 or 50 pots of money and greatly restricted how state and local agencies can spend from each pot. Better incentives are the solution, not more bureaucracy. Congress should give state and local governments more flexibility in how to spend the money, combined with incentives (see pp. 7-8) to insure the money is effectively spent.

Actually, no. The real problem with federal transportation spending is that Congress spends other people’s money on subsidizing transportation infrastructure. Politically-appropriated incentives offer no more of a solution than bureaucracy, because there is no political solution to the problem. The only way to determine where people need roads, or rails, or planes, or bicycle lanes, or alternative uses of scarce resources that have nothing to do with transportation or infrastructure, is to leave us — people, not agencies — free to experiment and work it out ourselves. There’s no way to approximate that by jiggering the way that subisides are allocated because there’s no way to simulate the effects of free and mutual exchange while leaving political ownership and political control intact. Unless and until you dissipate the control, all you have is a different style for managing the subsidy. You can’t fix the damage of taxation with more flexible or efficient allocation of the spoils.

What Congress should do is go home, give back the scarce transportation dollars they stole, and take up an honest living.

Advertisement

Help me get rid of these Google ads with a gift of $10.00 towards this month’s operating expenses for radgeek.com. See Donate for details.

2 replies to There Is No Right Way To Manage a Subsidy Use a feed to Follow replies to this article · TrackBack URI

  1. Discussed at radgeek.com

    Rad Geek People’s Daily 2011-05-17 – There’s the part where you say it, and there’s the part where you take it back…:

    […] a reminder: There’s No Right Way to Manage a Subsidy. And no right way to manage a captive market, […]

· October 2011 ·

  1. Discussed at radgeek.com

    Rad Geek People's Daily 2011-10-05 – Tertium Non Dant:

    […] GT 2011-04-27: There’s No Right Way to Manage A Subsidy […]

Post a reply

By:
Your e-mail address will not be published.
You can register for an account and sign in to verify your identity and avoid spam traps.
Reply

Use Markdown syntax for formatting. *emphasis* = emphasis, **strong** = strong, [link](http://xyz.com) = link,
> block quote to quote blocks of text.

This form is for public comments. Consult About: Comments for policies and copyright details.