LTTE: Energy, Housing, and Government Subsidies

Dear Editor,

The August 31, 2011 Letters to the Editor poised two authors side-by-side addressing three concepts that I see linking together: energy, housing, and government subsidies.  Walt Allen voices concern about industrial sized windmills being erected on West Virginia’s ridges, specifically in Mineral County.  Beth Thomason advocates for legislation (HR 25) co-sponsored by our congressional representatives that would assure that mortgage deductions would not be altered.

Mr. Allen’s reservations are two fold.  One issue is the change in our view of the mountains.  The other issue is his assertion that wind energy may not be viable except without government subsidies.  He would prefer to rely on responsible coal mining, clean natural gas, hydro-electric, and nuclear sources.  I will leave the viewscape issue and question about whether these other sources of electricity are done responsibility for another discussion.  The question I wish to raise is whether any of these non-renewable sources of energy would exist in their current forms without government subsidies over the past 100 years.

Subsidies come in two general forms: direct and indirect.  Coal, oil, natural gas, hydro-power, and nuclear reactors have all benefited from direct government influence through research, development, and exploration funding, tax incentives, right-offs and depreciation, and Bureau of Land Management leases at below market value cost.  Indirectly, government projects such as our national highway system, urban development, etc. provide the need and infrastructure to use that energy.  The loop continues as more development requires more energy and more energy encourages more development.

We might like to blame Presidents Clinton and Obama for socializing the USA, but you better go back a few generations to the Clinch River Breed Reactor project, the Glen Canyon and Hoover Dams, and the Tennessee Valley Authority rural electrification projects to see those trends start.  Hmmm. Did not our own power lines and now fiber optic project come from government grants?  Solar and wind projects, meanwhile, have mostly survived around the homes of hippy-dippy, homesteader folks.

Dare I even suggest that another indirect government subsidy would be our military interventions for national security, which includes economic security, which includes energy security?  I would not go so far as to chant, “No blood for oil”, but certainly our military presence in the middle east is more than out of humanitarian concern.  The latest calculation I read on the expense (beyond the usual military budget) for our recent war in Iraq is $751 billion.  But, our attempts to secure middle east oil goes back to at least the Shaw of Iran events, when I was in high school.

Meanwhile, Ms. Thomason wants to assure that the government helps to underwrite homeowners by keeping the mortgage interest deductions intact.  How can we balance the budget if ever pet subsidy is off limits for consideration?

Two final thoughts: Allen confesses to being conservative, and our congressional representative is Republican, yet they seem to agree that subsidies are okay as long as they are the ones they want.  Maybe this is why we do not have a balanced budget.  And, the other problem is that government subsidies look for big solutions.  I would rather see lots of small windmills and solar panels scattered around homes, cabins, and farms, so that we do not need so many big ones.

Moorefield Examiner, September 14, 2011

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About hermitsdoor

Up here in the mountains, we have a saying, "You can't get there from here", which really means "We wouldn't go the trouble to do that". Another concept is that "If you don't know, we ain't telling." For the rest, you'll have to read between the lines.
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3 Responses to LTTE: Energy, Housing, and Government Subsidies

  1. Barney says:

    Very interesting response, and on the mark. Don’t forget the largest subsidy of all; Oil. 27% tax deduction off the top, plus the oil depletion allowance. And to those who say lets develop oil on the US, we know there are likely less than 100 years of reserves, worldwide, left. Maybe now is the time to start working on Natural Gas, which we already have stockpiled and adequate sources, and without Fracking!
    That pinnacle of reasonable thought, Michelle Bachman, is against big government and subsidies, EXCEPT where they benefit her, such as the Medicare payments going to her husbands gay conversion clinic, and her Fannie Mae mortgage. The mortgage deduction is another favorite.
    Good piece. Keep up the good work.

    • hermitsdoor says:

      Thanks for adding some more details. I appreciate your fact-checking. I had heard that M. Bachman’s family income has mostly come from state and federal programs: teacher, foster children, representing her state, husband’s counseling clinic… Very much in parallel to your recent post on “Class Warfare” propaganda

  2. The Vicar says:

    Government subsides seem to have become behavior modifiers from those in power towards corporations and individuals. The challenge is that these subsides work in strange ways and do not always result in the desired out come. Driving through Ohio and Indiana last weekend I saw more corn than I have ever seen. It’s my understanding that corn as food and as bio-fuel has driven the price of corn up over the last few years. Does the government still need farm subsides to corporate farms in order for them the produce their crops?

    How many homeowners would think differently about paying $10,000 a year in interest if they lost their mortgage interest deduction on their income tax filings? Many Americans are reevaluating the wisdom of taking on large mortgage interest payments in order to own a home given the current dip in housing values. To me it seems that the mortgage interest deduction is one more incentive to live beyond our means (and I own a house with a mortgage).

    I have counseled couples who want to get married, but risk losing government housing vouchers which require that they declare that they are single. While the rent assistance programs may be well intended to reduce homelessness, they put people in a position of either lying about their relationships or forfeiting the financial help. There was a desire to marry on the part of the couple, but one of the criteria for receiving government help was that you not be married.

    When systems are broken sometimes it takes radical reforms to bring about change rather than incremental measures. Perhaps the elimination of all subsidies for 5 years and then a considered approach to future subsidies is the remedy. I understand that Michelle Rhee is no longer working for the DC Public Schools. 🙂

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