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Federal Subsidies for Rural Living

I read an interesting Jim Harper item this morning on what he dubbed the “Gore Tax”, i.e. fees assessed on telecommunications users in order to provide subsidies for rural and low-income telecom infrastructure. Given that rural areas are massively overrepresented in our political system and low-income voters are massively underweighted in legislators’ thinking, I thought it’d be worth checking to see what the dominant effect here is. And as I suspected, total spending on “high cost areas” is about four-times spending on low-income support.

Ryan McNeely looked at the net state-by-state flows and adjusted them for population size, letting us see here that the big winners are conservative rural states rather than Al Gore fans:

If you look at the complete data you’ll see that you have to go all the way to Utah at #20 to find a state that backed John McCain and suffers net fiscal losses in this program. I often shy away from these kind of state-by-state analyses because it’s often the case that conservative states win when programs help poor people. In this case, however, we’re looking at a program that’s mostly just dedicated to subsidizing rural living. We have a number of such programs in the United States, but their policy merits seem pretty dubious. There’s nothing wrong with living in a rural area if that’s what you want to do but there’s no reason to make it a specifically encouraged lifestyle choice. Indeed, environmental decisions point in the opposite direction.

Perhaps a United States without subsidies for farming and for rural telecom and transportation infrastructure would be a United States with more wilderness areas. Certainly it would be a United States with a more efficient overall economy and somewhat higher average level of prosperity.

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