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Author: mindshar Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 660  
Subject: Re: Some Reservations Date: 12/10/2008 1:54 PM
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We are the most overhoused country on earth.

What I meant is by what measure are we the most "overhoused"? Is this something that is backed up by some sort of statistic or just a naked assertion?

I just don't see at all how urban blight and suburban migration can be attributed to subsidies in any meaningful way. Generally developers of new subdivisions *do* have to pay for infrastructure like sewer, water, roads etc, so the cost *is* included in the price of housing. Either that or it is paid for by local property taxes, or other taxes levied locally by specific ballot measures, which can't be considered subsidies, since they are paid for by those receiving the benefits. The only possible exception to this is federal highway funds, but most countries including major European countries allocate road funds in their national budgets.

On the other side of the coin, we have economic redevelopment agencies and "enterprise zones" which use *direct* subsides to *encourage* development in urban areas.

If subsidies have any impact at all, in my opinion, it would be to incent *urban* development.

In Europe they do not subsidize new housing in this manner and so there are substantial economic incentives for neigborhoods to be maintained and rehabbed.

In Europe they tax gasoline and diesel fuel extremely heavily, which is the primary reason for higher urban concentration. If we levied the same taxes on motor fuel that Europe did we would see a significant migration back into cities over time, and most likely the end of urban blight as we know it. We might end up with *suburban* blight, but that's a different story.

In Europe they don't have urban blight as we do. It's all a result of foolish government subsidy.

But we don't subsidize suburban and rural development over urban development in the U.S. in any meaningful way. That's just not true. Europe's government influences urban versus suburban development *far more* than the U.S. through high fuel taxes. It's also one of the reasons public transportation is more economically viable there -- that and population density.

Any economist will tell you that subsidies promote economic inefficiency.

That is *not* the same thing as saying all economic inefficiency is a result of subsidies though.

And while I agree that subsidies tend to come with undesirable (and often unintended) side effects, it doesn't mean that they *always* end up with an overall net negative impact does it?
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