Current Weather
The Spy FM

Your Subsidy Is My Incentive

Filed by KOSU News in US News.
July 25, 2012

We’ve taken a look at government spending in a few different ways lately, including the posts 50 Years Of Government Spending, In 1 Graph in May, and, more recently, Dissecting Federal Spending With An Eye On Cuts.

Now the folks over at Pew Charitable Trusts — a warren of data, analysis and insight — are giving a glimpse of the spending through another prism: subsidies.

Pew’s Subsidyscope project says it “aims to raise public awareness about the role of federal subsidies in the economy.” On Tuesday, it released data looking at the subsidies received by nine sectors of the economy: agriculture, education, energy, health, housing, national defense, natural resources and environment, science and technology (including space), and transportation.

The total? Some $823 billion in grants, $460 billion in tax breaks, and $113 billion in no-competition contracts — for one year, according to Tuesday’s report.

The latest numbers show, for example, that in fiscal 2009 the federal government spent $504 per household on “direct expenditures” for housing — housing assistance grants, government housing contracts, etc.

But the government spent $1,581 per household, or $185 billion in 2009, on 13 distinct “tax expenditures” — aka tax breaks — including the mortgage-interest deduction ($79.4 billion) and a capital-gains break for those selling their homes ($23.5 billion).

“Subsidy” is a powerful word, of course. Technically, it just means the government is picking up part of the cost for something (and by extension, not for other things).

But aside from economists and journalists, it’s often used with a bit of a sneer. After all, one person’s incentive is another person’s subsidy.

The mortgage interest deduction — one of the biggest and most popular on the federal books — is an incentive for homeownership and encourages people to put down roots in their communities.

Or maybe it’s a subsidy for people who buy their homes, as well as the banking and housing industry — a subsidy that renters don’t get.

Same with health care, at $4,728 per household in direct expenditures (think Medicare and Medicaid) and $1,598 in tax expenditures — most of which came from not taxing the premiums employers pay for workplace health insurance.

If you listen to our show regularly and this is all beginning to sound familiar, it should: One of the big reasons our No-Brainer Economic Platform panel came out swinging against tax breaks (including the mortgage-interest deduction and tax breaks for health insurance) is that they quickly become entrenched, and gum up the tax code with all kinds of conflicting and costly incentives and subsidies. [Copyright 2012 National Public Radio]

Leave a Reply

9AM to 10PM Sound Opinions

Sound Opinions

Take two nationally respected rock critics, the latest music news, personal commentary, and exclusive interviews and performances, add a huge pile of records old and new, and the result is Sound Opinions-the world's only rock and roll talk show.

Listen Live Now!

10AM to 12PM The Toaster Brunch

The Toaster Brunch

The Toaster Brunch is our Sunday morning Reggae show, hosted by E-Roy. The Toaster Brunch has an active following of scooter clubs and rastas from around the world. E-Roy is also a high school principal.

View the program guide!

12PM to 1PM This American Life

This American Life

Take in a slice of Americana with critically acclaimed host Ira Glass on "This American Life." Each week he picks a theme, then gives his writers and performers the freedom to weave real stories from real people around that theme in a manner they find most engaging.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center