At their start, many government programs actually do produce benefits greater than their costs. But the reason why government fails is that political pressures force the government to extend the programs to as many jurisdictions as possible.
The federal government first got involved in public transit because the railroads wanted to stop providing commuter train service to New York, Boston, Philadelphia, and Chicago. Many of these trains cross state lines, thus seemingly justifying a federal program. While the Antiplanner doesn’t see why other taxpayers should have to subsidize commuters in a few big cities, if the program had gone no further than to subsidize these lines, it wouldn’t have wasted too much money.
But senators and representatives from other states could not allow federal funding to go to these four metro areas alone. So the 1964 Urban Mass Transit Act was written to allow public transit agencies in any state to apply for federal capital grants, even if the agencies services did not cross state lines.
