Well speaking of apples and oranges:
If I take a dollar out of my pocket and give to a guy who owns an apple tree, and he gives me an apple, have I subsidized the guy with the apple tree?
Now, if I take a dollar out of my pocket and give to the government, and they turn around and give it to the guy with the apple tree, and he gives me an apple, has the government subsidized the guy with the apple tree?
Either way, the guy with the apple tree
You are playing word games for the sake of the games. Giving a guy a buck for an apple is American business. Giving the government a dollar to give to a man for his apple is subsidizing in the broadest sense. In reality I suppose The man on the street would give the apple salesman 80 cents and another 80 cents to the government to give the apple salesman 20 cents in order that he makes the dollar. But what really happens is that the businessman doesn’t grow apples and gets a buck from the government for every apple he doesn’t grow. The man on the street then gives his grocery merchant a dollar for an apple imported from Chile` and the American company receiving the dollar for not growing the apple cries foul and gets another dollar from the government.
If that example is a subsidy in the broadest sense, then let me ask:
Who was it that received that subsidy?
Guys, enough already! We all know Amtrak is subsidized and by whom and why.
The purveyor of the ;product or service receives the subsidy be it running a train, boat, plane or bus or raising hogs or corn or selling gadgets…if the priced paid by the end user is less than what the purveyor needs and the government makes up that difference, then you have a subsidy. Right?
Well yes maybe in that case, but you are introducing something new to the argument. In my apple example, I never said anything about the price paid by the end user being lower what the purveyor needs. If that were the case, there would be something fundamentally flawed in the economics of the transaction. If the purvayor needs more, he or she should charge more. Then if the customer won’t accept the price increase, the purveyor needs to get a second job.
[quote user=“Bucyrus”]
In my apple example, I never said anything about the price paid by the end user being lower what the purveyor needs. I acknowledge that in that paying a dollar as the cost of the product is a sale not a subsidy. A subsidy would be if you paid 80 cents for an apple and the government gave 20 cents to make it a dollar.
If that were the case, there would be something fundamentally flawed in the economics of the transaction. If the purvayor needs more, he or she should charge more. Then if the customer won’t accept the price increase, the purveyor needs to get a second job. And this is exactly what our farm subidy program is all about. However, big business, instead of Mom and Dad, own the farms and pick up the subsidies…but corporate welfare, we are told, doesn’t exist.
So if a trucker or airline can’t provide the service at what the custome
And on it goes…
Yes, Amtrak is heavily subsidized, but that is not the point of discussing the definition of subsidy.
Defenders of Amtrak always point to its subsidy and claim that the subsidy is not objectionable because we subsidize other forms of transportation. That is why we need to define what is a subsidy.
A subsidy is a payment to a vendor to make his income at least even with his cost or to guarantee cost plus reasonable profit. In the case of Amtrak it is to cover out of pocket costs where fare does not meet that amount. Government is most often cited for offering subsidies to agriculture and transportation businesses for instancre, but a business can also subsidize itself by having a gross leader pay for the short comings of a loss leader. In relation to transportation here, we are talking governments payments to an operator to not lose money.
[quote user=“Bucyrus”]
Falcon48:
Bucyrus:
I think it would be interesting to consider all of the off-book or externalized costs and credits that can be found. But we need a definition of subsidy. Making a profit or receiving a subsidy are not the only two outcomes possible. For example, if Amtrak did not make a profit, but did cover its costs through fares and taxes provided only by the riders, it would not be receiving a subsidy.
So the question posed in the title of this thread is not an either / or question.
Defining “making a profit” and “receiving a subsidy” is pretty simple, and can be done withou
[quote user=“Falcon48”]
Bucyrus:
Falcon48:
Bucyrus:
I think it would be interesting to consider all of the off-book or externalized costs and credits that can be found. But we need a definition of subsidy. Making a profit or receiving a subsidy are not the only two outcomes possible. For example, if Amtrak did not make a profit, but did cover its costs through fares and taxes provided only by the riders, it would not be receiving a subsidy.
So the question posed in the title of this thread is not an either / or question.
All you say is true. However, there is another, ideological agenda at work with the folks who try to distinguish between tax dollars for services the taxpayer uses and those he/she doesn’t. Amtrak, like most government programs, benefits taxpayers, though often the benefits are indirect. For example, schools. I and my family haven’t been in school or public university/college for years, not have we had a child in attendance in years either. Yet I pay about 2/3 of my property tax every year alone to “subsidize” them. Other “subsidies” come from my sales, state and federal income taxes. I receive no direct benefit, but many indirect ones. In addition, it is simply a responsibility for living in a society, as opposed to living in isolation on your own little island, where you only pay for what you want personally.
I don’t disagree with you. Saying that government support of a particular program or service is a “subsidy” doesn’t mean that it’s necesssarily bad. It merely leads to the next question: whether the “subsidy” in a particular case is a good use of public funds. I don’t think anyone would dispute that public support of education is a good thing and something that the government ought to do (well, maybe some would, but they would be a small minority). Government support of Amtrak as it is currently structured is, perhaps, more debatable. But identifying the government support as a “subsidy” is merely the starting point in that debate, not the answer to it.
By the way, I overlooked one important caveat in my discussion of “what is a subsidy”. There are some government programs where the government support, and the taxes which fund that support, are actually user fees. In transportation, highway fuel taxes are an example of this. The taxes are a way to make highway users pay for highways
Just to muddy the waters further:
Article in last weeks WSJ that some in the House want to eliminate a $6.5B item for FY 2011 air traffic control grant to upgrade the air traffic system. This will be an amount that would be needed for each of the next ten years. Quite a subsidity. But is it necessary? IMHO yes!
For the state of Georgia essential air service subsidities were about $1.75M. I believe that is more per passenger than the subsidity for AMTRAK’s Crescent and Silver trains per boarding Georgia passengers? More people certainly board AMTRAK every day in Georgia than board Barbie Jets!
Our local airport is trying for a federal grant of $2.5M for a runway extension that will never be paid for by airplane fuel since only about 12,000 gallons of all aviation fuels are pumped per month. Unfortunally I do not know the amount of fuel taxes per gallon but will try to find out.
The projected cost for NextGen is approximately $22 billion. The cost of the system will be recovered for the most part through user taxes. NextGen is not just for the commercial airlines.
According to the FAA, approximately 30 to 35 per cent of the traffic it controls is commercial airline flights. The bulk of operations are general aviation and military traffic. The airline industry has presented data at Congressional hearings supporting the notion that it pays more than its fair share of the air traffic control system.
The budget for The Essential Air Services Program was approximately $171 million in 2009. This program was mandated in 1979 by Congress as part of commercial airline deregulation. Although I have not worked up the numbers, I would be surprised if the cost per passenger mile is below Amtrak’s cost per passenger mile. Moreover, outside of a few remote areas in the west and Alaska, most of the airports served by the program are within an hour o
Neither. This is a local general aviation airport (5850 ft runway) that has approximately 1200 operations per month in summer and 800 in winter (many touch and gos). High fuel numbers about 9000 gal jet fuel and 3000 - 5000 av gas (these are 2008 figures and the numbers have gone down considerably since then. There has never been any airline service or cargo service.
There are many such small airports like these spread all over the country. Many are convenience for pilots in that they provide very inexpensive shelter and operation compared to larger commercial airports. Some of these airports I would think would be very necessary if beause they are the only ones for hundres of miles. Others I know of are literally within sight of each other and there should be some kind of rationalization not just for the existence of the airport but also for air traffic conflicts and congestion. Basically there is no rationalization for these small airports,. In reading one report on this money it is noted that many allocations are in the $2000 dollar range and down as low as $9 bucks! So, a call of “let’s get serious” is not out of the question here.
A fair number of these smaller general aviation airports in urban areas have shut down because the land was worth more for development. The airport was in effect worth more dead than alive.
In Broome County NY there is a “major” airport with USAIR and Delta Commuter; it also hosts small and private planes. Within 10 miles there is an airport for small and private plane with lights and all, and about 3 or 4 smaller airports. Within 40 miles that jumps to two “major” (as described above), another 3 or 4 lighted fields, and literally dozens of smaller airports. How many are reallly necessary? How many earn their keep? Is a $10 subsidy too much or $2000 too little? Off hand I really don’t see the rationalization for so many air strips especially when they are all owned or under the juristiction of a municipal government of some kind.
To extend the above and bring it to topic. Broome County has no rail passenger service. One rail line between here an Utica is out of service since disasterous flooding in 2006 with no industry or reason right now for the railroad to repair it. One line to Buffalo needs a bridge replaced half way between there and here; another is owned by a Class One but operated by a regional; all are single track (one to Port Jervis, one to Scranton, one to Hornell and BUffalo, one to Syracuse, one to Utica[OOS], one to Schenectedy. Should we, as a community, be expecting or asking for help to get better freight and rail connections to boost our ecnomomy? be joined by adjacent and other line communities in asking? Especially for rail passenger service to New York City and or Buffalo? Or should we just let these little airports which do not add to the local economy or which could be consolidated in some way, get the earmarked money?