The House Appropriations Committee released its proposed economic stimulus package yesterday, which has supposedly been endorsed by President-elect Obama. Much of it is not within my area of expertise, but the parts that are seem very unlikely to promote any economic stimulus.
If spending money is all that is needed to revitalize the economy, then all the government needs to do is dig holes and fill them up. Unfortunately, too much of this stimulus package does little more than that.
I am not convinced that increased federal spending will help at all, but I am convinced that it won’t help unless that spending goes for things that are truly needed. Projects that are not needed or used will not produce any “multiplier effects,” which means the stimulus will be small and short-lived. Projects that are heavily used will produce multiplier effects that not only make the stimulus more effective, they make it last longer.
The best sign of such multipliers is whether people are willing to pay for projects out of user fees. In such cases, the feds might be able to jump-start projects, but the best way would be to offer loans to be repaid out of those user fees, not grants. This will also minimize the long-term effects of deficit spending, which in the long run could dampen any benefits from the initial stimulus.
Here are some line-by-line comments on the proposed package.
“Clean, efficient energy”: The package starts off proposing $32 billion for a “smart electrical grid.” According to George Mason University economist Alex Tabarrok, this may actually be a good idea. But if it is so good, we could do it in the form of loans to be repaid by electric companies out of electrical rates.
“Transform our economy with science and technology” includes $6 billion for broadband internet access. I’ve lived in the boonies for 10 years (two different boonies, in fact), and believe me, you can get broadband anywhere you want it. We don’t need government support to expand it.
“Modernize Roads, Bridges, Transit, and Waterways” includes $30 billion for highways and $10 billion for transit, meaning transit gets 25 percent. That’s an increase from historic levels of federal support to transit, which (since 1991) has been 15 to 20 percent. Yet transit moves only about 1 percent as many people as highways. This $10 billion for transit is a complete waste. Transit fares cover only about a quarter of transit costs, which means we are already spending way too much money on it. Fortunately, the package includes only $1 billion for new rail construction, which limits the damage somewhat — my major concern is that we don’t build a bunch of new rail lines that will impose more deficit spending down the road.
Highway user fees, on the other hand, pay for more than three-quarters of highway costs, and could pay for 100 percent without increasing the costs of transportation by more than 2 percent. So the $30 billion for highways should be in the form of loans, not grants, that would be repaid out of highway user fees. There is no reason why any tax subsidies should be given to highways (or, for that matter, any transportation).
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Another $3.1 billion goes to federal lands for “improvements to visitor facilities, road and trail restoration, preservation of buildings of cultural and historic importance, rehabilitation of abandoned mines and oil fields, and environmental cleanup projects.” Most of this is not going to have any multiplier benefits and should be paid for out of public land user fees (except that Congress won’t let the agencies charge users market rates).
Another $850 million will go to hazardous fuel reductions to stop forest fires. No multiplier effects, virtually no benefits. Most will go to reduce fuels on private lands. Why can’t the private landowners pay for it? Again, this should be loans, not grants, if it should be done at all (which it probably should not).
The package also includes $13.5 billion for various kinds of housing subsidies. I don’t think these will do much.
A lot of the package is oriented toward “green” technologies. For example, it proposes to replace many vehicles in the federal auto fleet with “alternative-fuel vehicles that will save on fuel costs and reduce carbon emissions” and money to renovate federal buildings with a focus “on increasing energy efficiency.” Has anyone done an analysis to find out if these things are cost-effective? I strongly suspect that the energy cost of building new vehicles or reconstructing buildings will outweigh the energy savings.
As previously noted here, tax cuts are likely to do more to stimulate the economy than more deficit spending. So the proposed $275 billion in tax cuts may be more effective than the $550 billion in spending.
I am not familiar enough with the issues to comment on the education, health care, public sector, or most of the other parts of the package. Education is one thing that my user-fee rule might not apply to. But our educational system is so rotten and inefficient that I can’t expect this will do anything other than boost teacher and administrator pay.
In general, it appears to me that every federal agency and interest group that submitted proposals got some of what they asked for. Instead of picking projects that really have a chance of stimulating the economy, whoever put this package together seemed more interested in giving every powerful interest group a piece of the action. As Meagan McArdle says, “Mostly, Democrats took their wish lists, called them “stimulus”, and look set to inflict them on the American people in badly done drag.” I am therefore pretty pessimistic that it will do anything at all.
The good news is that the economy will eventually recover. When it does, there is no doubt that the people who approve this package will take credit for it. We can only hope that some future Milton Friedman will successfully debunk their claim, or at least the parts that are untrue.
One more point: What does it mean that an airplane that “landed” in the Hudson River received at least 20 times as much attention from the major news networks as the proposed stimulus package? No one seems to be phased or even to care that Congress is about to spend more money than it has ever spent before — most of which is likely to be a waste.
What does it mean? It means the MSM and it’s target audience can only appreciate simple things that happen in one place at one rime. The pilot is a hero for saving 150 lives. High gas prices were never given hero status when they were saving 150 lives a week.
What does it mean that an airplane that “landed†in the Hudson River received at least 20 times as much attention from the major news networks as the proposed stimulus package?
You pretty much answered your question near the top:
Much of it is not within my area of expertise
Most people don’t understand what’s going on, which leads to a classic “representative democracy in action” situation. We’re left with little choice other than to hope that the people “we” represented are both competent and acting in our best interests.
ROT: Highway user fees, on the other hand, pay for more than three-quarters of highway costs, and could pay for 100 percent without increasing the costs of transportation by more than 2 percent. So the $30 billion for highways should be in the form of loans, not grants, that would be repaid out of highway user fees. There is no reason why any tax subsidies should be given to highways (or, for that matter, any transportation).
THWM: If the street in front of your home is not profitable, should it then be closed?
ROT: The proposal also includes $31 billion “to modernize federal other other public infrastructure.†This includes $1.1 billion to Amtrak, most of which will be sucked up by Northeast Corridor maintenance needs. While this is a waste, as with transit, as long as none goes to new rail construction (such as high-speed rail in California), the damage will be limited.
THWM: Amtrak gets very little funding per capita, the USAF has planes that cost over a $1 billion a piece.
O’Toole you’re just lucky that you get paid to write bullshit.
If spending money is all that is needed to revitalize the economy, then all the government needs to do is dig holes and fill them up.
JK: Actually this is a much better idea than building light rail for the following reasons. (But lets be clear that this is a manual labor job using local labor):
1. All of the money stays local. None of it goes to out of state steel mills or out of country manufacturers. Buy local as they say.
2. The waste ends with the end of “constructionâ€Â. Unlike light rail, where the waste goes on for the entire life of the project in the form of ongoing subsidies to every rider.
3. The project does not increase traffic congestion like light rail since it does not create trains that interfere with traffic.
4. The project does not increase people’s commute time since it leaves the road & bus systems intact.
5. The project does not emit huge amounts of CO2 (for Al’s zombies that still believe that crap) from construction machines, only the breathing of labor.
6. It’s a Luddite’s dream since it does not use machines..
7. It a green idiot’s dream since it does not do anything that would benefit man. And it restores nature to its state before the project. It is truly back to nature
8. It is the ultimate green job – should we build our entire society around it?
Thanks
JK
I sense in Jim much anger.
What does it mean that an airplane that “landed†in the Hudson River received at least 20 times as much attention from the major news networks as the proposed stimulus package
It means that it’s a simple matter to put ourselves in the shoes of the people on the Hudson. It’s not a simple matter to put ourselves in the shoes of people trying to fix this sh*t swindle, or people perpetrating the sh*t swindle.
I sense…much anger.
Ewww. I read the comment above.
I sense much fear, and bitterness. Look at the structure and phrasing and the simpleminded return to the single-issue focus, even if not germane, of the marginalized. Don’t try to feed honey to buffer the bitterness.
DS
“One more point: What does it mean that an airplane that “landed†in the Hudson River received at least 20 times as much attention from the major news networks as the proposed stimulus package?”
I’ll give props where props is due. Fact is we can’t rely on T.V and most print news to convey the information that is actually important. And to be engaged in a conversation of important news like this insanely huge stimulus package, we come to the Antiplanner (please omit posts about snow tires). We have to sift through all the crap on the interweb just to find little gems like the Antiplanner. For some reason the major news networks don’t seem to want us to care. Why not?
“If spending money is all that is needed to revitalize the economy…”
Maybe it is that we are spending theoretical representations of money. I know little about macro economics, but in my life, if your broke and in debt, accruing more debt doesn’t seem to be a good way to get into the black.
As the Antiplanner suggests, this is a political maneuver not an economic one. This may be the best case for the Antiplanner’s mission. There seems to be message control on the three T’s of the stimulus: targeted, temporary and, for this discussion the most important, timely. If it is timely, it can hardly be rational. The timely element will cancel the targeted element it seems.
In the greater picture, this situation is the anomaly. When the economy is stable, it is predictable. Thus plannable.
Speaking of Planning and the Hudson: none of you have drawn attention to the fact that the pilot runs a safety consulting firm and is well versed in preparedness (read: a plan) and the ferry crews trained monthly on just such a rescue (read: a plan).
My planning reference notwithstanding, it seems very evident why this story is so popular: increasing unemployment, not a bit of decent news in months (even the dems hardly took a breath it seems on november 4th). A little good news…why not?
The other thing, t g, is that most people don’t go around fetishizing the economy and counting every last penny 14 times to the exclusion of the world around them. It is basic human nature (for most humans anyways) to pay attention to the best possible outcome arising from a potential disaster.
Add to that the fact that ordinary people dropped what they are doing and went to the aid of others. Instead of, seemingly like some ideologies, only caring about themselves and their immediate families.
No wonder the news coverage was frowned upon by some – people didn’t act selfishly in their own self-interest! What’s the world coming to. Nest thing you know they’ll be socializing the rescue industry…
DS
“No wonder the news coverage was frowned upon by some – people didn’t act selfishly in their own self-interest!”
Dan,
I didn’t take O’Tool’s point this way at all. I’ve been surfing the web today and the $800 billion stimulus package proposal has been tucked away in the corner. I don’t want to take away anything from what happened in NY. It was cool to see that planes can actually land in water and people survive (I won’t chuckle any more during the safely briefing on the plane). It was cool to see that the ferries were prepared ad planned for such occasions. But the Government is proposing to spend more money then they ever has in one shot. That’s BIG news dude! Not noticeably mentioned on the following home pages:
Huff post
CNN
NY Times
CNET
USA Today etc. etc. etc.
I’m not going to argue about what news is more important, but for a $800 billion tax payer funded check to get almost no attention whatsoever is bewildering to me. I want to know more. (I have found stories and various takes, but it took more effort than it should have)
bennett:
I was simply taking the opportunity to make a point. Don’t get me started on these f’n kleptocrats and their treasure-robbing wealth redistribution.
DS
Speaking of holes:
Should The Government Stop Dumping Money Into A Giant Hole?
http://www.theonion.com/content/video/in_the_know_should_the_government?utm_source=embedded_video
Oh thank you, Lorianne…
“If you love America, you throw money right into its hole.”
My week is done here.
teh funneh! Thank you Lorianne!
DS
“Highway user fees, on the other hand, pay for more than three-quarters of highway costs, and could pay for 100 percent without increasing the costs of transportation by more than 2 percent. So the $30 billion for highways should be in the form of loans, not grants, that would be repaid out of highway user fees. There is no reason why any tax subsidies should be given to highways (or, for that matter, any transportation).” -ROT
When are those “user fees” going to trickle down to local streets? You can’t have the highways with out the streets that connect them.
Developers are increasingly having to pay for their streets and infrastructure in their developments per municipal requests (this wasn’t always so) that are passed off to the home-buyers (which makes sense).
This got me thinking, why not make new developments pay a mandatory fee for light rail? It seems automobiles get an advantage due to some of these rules, much like highway use benefits from general tax funds being used towards local streets.
D4P Says: I sense in Jim much anger.
THWM: That was a good one!
Some people want to confuse the public about highways and subsidies. Highway user fees pay for more than three quarters of all public costs of all highways, roads, and streets. Fuel taxes are probably a good way of paying for the maintenance of local streets (the original cost of constructing local streets are generally covered by developers). Tolls are the best way of paying for construction and maintainace of congested highways. There is no need to subsidize any of them.
Yes ROT, we know you want to confuse the public about highways.
Not all roads are the same, but they are part of the same system.
Again thanks for comparing apples to oranges.
Highway user fees pay for more than three quarters of all public costs of all highways, roads, and streets.
I’ll bookmark this comment, so when the ideologues try and argue that autos pay their own way, I’ll just point them here.
DS
Roads built in new subdivision developments (and paid for by developers) are usually not easily accessible to the public and could hardly be considered apart of a city “street network”. Arterial and collector roads are not paid for and maintained by any one source. Some of it is from city gas taxes, property taxes, increases in utility fees, traffic impact fees, etc. Cities are finding out that the gas tax has not been increased in years and that the cost of construction has doubled. Funds that are allocated down from the state transportation departments (to municipalities) are not going very far.
I think it is erroneous to make a blanket statement regarding automobile user fees in saying three quarters of it is paid. 1) Gathering data and making a consensus statement of all areas/roads would be difficult 2) different states/cities have different rules in regards to its local street construction, and therefor is not very factual. It is often a case by case scenario.
Automobiles also do not pay for their fire and police protection, which is paid for by general taxes.
Roads built in new subdivision developments (and paid for by developers) are usually not easily accessible to the public and could hardly be considered apart of a city “street networkâ€Â.
Not all subdivisions.
Many are rejecting the failed old subdivision road network model (~1947-1990-ish) and doing a better job at making road networks with decent connectivity.
DS
Dan Says: Highway user fees pay for more than three quarters of all public costs of all highways, roads, and streets.
I’ll bookmark this comment, so when the ideologues try and argue that autos pay their own way, I’ll just point them here.
THWM: Though this is still a false hood, roads have existed for millennia before automobiles.
“Many are rejecting the failed old subdivision road network model (~1947-1990-ish) and doing a better job at making road networks with decent connectivity.”
I would really disagree. I think “many” is a blanket statement – I still see “plenty” of cul-de-sac, non-connected type developments.
I would really disagree. I think “many†is a blanket statement – I still see “plenty†of cul-de-sac, non-connected type developments.
JK: cul-de-sacs have lower crime rates, lower ped accidents and are generally safer and quieter. Why do planners not like safety and piece & quiet?
Thanks
JK
ws said: Automobiles also do not pay for their fire and police protection, which is paid for by general taxes.
JK: Automobiles also do not pay for schools. Why should they pay for fire & police?
Thanks
JK
I would really disagree. I think “many†is a blanket statement – I still see “plenty†of cul-de-sac, non-connected type developments.
Interesting. In my last two places, I saw/see very few (WA, CO). In CO, we have very good road engineers who understand that high network connectivity is good for everybody. Maybe you have a bunch of old-schoolers where you are?
DS
“cul-de-sacs have lower crime rates, lower ped accidents and are generally safer and quieter. Why do planners not like safety and piece & quiet?” -JK
What correlation do cul-de-sacs have with crime? None.
1)Give some evidence of cul-de-sac homes and crime rates. In subdivisions, only a few homes are in a cul-de-sac, the rest are on the street.
2)It’s like saying higher iPod ownership is correlated with crime reduction. These two have nothing to do with each other (other than socioeconomics).
“JK: Automobiles also do not pay for schools. Why should they pay for fire & police?” -JK
Automobile accidents require massive municipal funds to respond to, even in non-death related accidents (fender benders). They are a burden on city budgets. More police/fireman are needed to respond to “policing” the roads – tickets, DUIs, hit and runs, emergency services etc.
We need police and fireman, but automobile related incidents constitute heavy burden on these services that are payed for by everyone. I don’t take the “user fee” as far as most libertarians regarding police and fire services, but it is hypocritical of you not to understand that emergency response to car-related occurrences is a substantial burden to everyone – and not the individual.
“Interesting. In my last two places, I saw/see very few (WA, CO). In CO, we have very good road engineers who understand that high network connectivity is good for everybody. Maybe you have a bunch of old-schoolers where you are?
DS”
I live in the Portland Metro area. There are some old-schoolers here but I really have not seen good street connectivity in most areas (except there is one development that puts walking paths at the end of its cul-de-sacs. Very convenient for walking to places).
ws said: What correlation do cul-de-sacs have with crime? None.
JK: That is not what the European Union stats say. They make people who don’t belong there an unusual occurrence and thus they stand out. If there are always a lot of strangers around, no one notices the occasional criminal until it is too late.
ws said: Automobile accidents require massive municipal funds to respond to,. . . . More police/fireman are needed to respond to “policing†the roads – tickets, DUIs, hit and runs, emergency services etc.
JK: Auto accident rates are far, far, below light rail accidents on a per passenger-mile basis. If we all switched to the planner’s wet dream transportation your problem would skyrocket.
Massive police presence is needed to keep toy trains crime free. Unfortunately there is no money for this because cities like Portland have given away most of their money to developers to build smart growth crap that makes no sense to anyone except planners.
ws said: In CO, we have very good road engineers who understand that high network connectivity is good for everybody.
JK: Are you saying more traffic on neighborhood streets is good? Good fo who? Care to offer some proof of that statement, please focus on crime and quietness.
ws said: . . . (except there is one development that puts walking paths at the end of its cul-de-sacs. Very convenient for walking to places).
JK: Also very convenient for criminals! But planners never care about much beyond creating more density and looks.
Thanks
JK
“That is not what the European Union stats say. They make people who don’t belong there an unusual occurrence and thus they stand out. If there are always a lot of strangers around, no one notices the occasional criminal until it is too late.” -JK
What does the EU have to do with America?
“Auto accident rates are far, far, below light rail accidents on a per passenger-mile basis. If we all switched to the planner’s wet dream transportation your problem would skyrocket.” -JK
Define “auto accident”. Are ALL accidents reported in the statistics, or just ones of a certain nature? A car running a red light dedicated to for a train is not the fault of light rail. How many people die per year on mass transit compared to automobiles (per mile basis)? 45,000 people die a year due to automobiles, your “statistics” are damn lies.
Air traffic on a per mile basis is one of the safest modes of transportation. That does not tell us anything about the actual safety (or perceived) safety of a transportation mode.
“Also very convenient for criminals! But planners never care about much beyond creating more density and looks.” -JK
Roads are pretty convenient for criminals too. If I were to rob a bank or house, I would definitely want a car. I could never imagine a person robbing a house with a TV under their arm waiting in a well lit light rail stop. Would you rob a bank without a getaway car and driver? Do you watch movies?
Planners designed the exclusionary neighborhood that you are defending. I have no idea how you can complain about planners when they created the utopia that you champion.
I had, literally, just written the following as part of my bi-weekly column when I read Randal’s short essay:
“Governments around the world are lining up to promote infrastructural investment either by promoting new projects or bringing forward those already on the drawing board. This is a risky strategy because over-investment in infrastructure can simply transfer jobs from the private sector into the public sector and further starve the private sector of investment capital.
My biggest fear is that the chosen projects will reflect current Smart Growth planning fads rather than rational economic analysis.
We must all insist that any investment of the little capital available goes to projects with the highest benefit cost ratios. Not a single dollar should go into any project that cannot even cover its cost of capital because such projects actually destroy our meager savings and we have lost enough of our savings already.
The basic test must be “would a private investor fund the project and expect to make money?†If not then put the money somewhere else. There go all the fancy rail schemes. The best thing to do with our intercity rail is turn the rail beds into truck and bus lanes. The proposed Auckland Hamilton Commuter Rail service is promoted on the basis of 90 passenger trips a day. Imagine how many trucks would use the same route and imagine how much congestion relief that diversion from the highway loadings would generate.
But it will take a courageous government to bite the bullet and tell Aucklanders that investing billions of dollars in train sets will simply extend the depression by destroying wealth and starving the private sector of scarce resources.”
On culs-de-sac: I don’t know if all your cities are flat but they are a great solution to servicing valleys between hills without the need for massive earthworks. You simply cannot impose a grid system on the kind of topography that dominates most cities in New Zealand – and I suspect many parts of America.
“The best thing to do with our intercity rail is turn the rail beds into truck and bus lanes.”
Good idea, we should turn New York City’s rail system, which is responsible for the movement of billions of dollars in intellectual wealth, into a truckyard and bus system.
“On culs-de-sac: I don’t know if all your cities are flat but they are a great solution to servicing valleys between hills without the need for massive earthworks. You simply cannot impose a grid system on the kind of topography that dominates most cities in New Zealand – and I suspect many parts of America.”
San Francisco has incredible topography on a gridded system. So does Seattle in many places. There’s pros and cons on doing this. Cul-de-sacs occupy an enormous amount of space and cannot be placed on steep hills. Cul-de-sacs have more to do so with creating unconnected streets. You can have connected streets that are not in a “gridded” pattern that goes with the topography. There are many examples worldwide of this, although American cities are predominately gridded.
WS asserted:
> Automobiles also do not pay for their fire and police protection, which is paid for by general taxes.
It’s nearly always a bad idea to make blanket assertions such as the above.
Here in Maryland owners of motor vehicles do indeed pay a yearly surcharge (when vehicle registration fees are paid) to support the Maryland State Police Aviation Command, which provides medevac helicopter services to victims of highway crashes (and other incidents), and are also used for law enforcement purposes.
On U.S. (and many non-U.S.) toll roads and toll crossings, the tolls usually fund all law enforcement services on the toll road – and in some cases, the tolls also fund fire and rescue services on the toll road.
Antiplanner wrote:
> I am not convinced that increased federal spending will help at all, but I am convinced that it won’t help unless
> that spending goes for things that are truly needed. Projects that are not needed or used will not produce
> any “multiplier effects,†which means the stimulus will be small and short-lived. Projects that are heavily
> used will produce multiplier effects that not only make the stimulus more effective, they make it last longer.
>
> The best sign of such multipliers is whether people are willing to pay for projects out of user fees. In such
> cases, the feds might be able to jump-start projects, but the best way would be to offer loans to be repaid
> out of those user fees, not grants. This will also minimize the long-term effects of deficit spending, which
> in the long run could dampen any benefits from the initial stimulus.
Some of the all-time best words from the Antiplanner are written above.
I will add that funding transit projects that will simply incur ever-more operating deficits (as all or
very nearly all rail transit projects in the U.S. do) would not seem to be a good use of stimulus dollars.
Owen McShane wrote:
> I had, literally, just written the following as part of my bi-weekly column when I read Randal’s short essay:
>
> “Governments around the world are lining up to promote infrastructural investment either by promoting new
> projects or bringing forward those already on the drawing board. This is a risky strategy because over-investment
> in infrastructure can simply transfer jobs from the private sector into the public sector and further starve
> the private sector of investment capital.
>
> My biggest fear is that the chosen projects will reflect current Smart Growth planning fads rather than
> rational economic analysis.
>
> We must all insist that any investment of the little capital available goes to projects with the highest
> benefit cost ratios. Not a single dollar should go into any project that cannot even cover its cost of
> capital because such projects actually destroy our meager savings and we have lost enough of our
> savings already.
Owen, well stated!
Consider also that these projects then burden taxpayers with endless transit operating deficits, which benefit
tenured employees of the operators of the transit systems (at least in the U.S.), and few others.
ws Says: “The best thing to do with our intercity rail is turn the rail beds into truck and bus lanes.â€Â
Good idea, we should turn New York City’s rail system, which is responsible for the movement of billions of dollars in intellectual wealth, into a truckyard and bus system.
THWM: Owen is talking about eliminating all rail lines on a national level, so that road transport has a monopoly.
Hey, we have to give him credit that at least he’s honest enough to admit that he hates rail transport, because it’s rail transport. Unlike other people that hide behind fake economic bullshit.
For that matter members of the Klu Klux Klan hate Barack Obama, because of the color of his skin and that’s their personal choice. Though it’s exactly the same mentality.
C. P. Zilliacus: “It’s nearly always a bad idea to make blanket assertions such as the above.
Here in Maryland owners of motor vehicles do indeed pay a yearly surcharge (when vehicle registration fees are paid) to support the Maryland State Police Aviation Command, which provides medevac helicopter services to victims of highway crashes (and other incidents), and are also used for law enforcement purposes.
On U.S. (and many non-U.S.) toll roads and toll crossings, the tolls usually fund all law enforcement services on the toll road – and in some cases, the tolls also fund fire and rescue services on the toll road.”
ws: I am on the West Coast and I have never come across a toll road in my life. Tolls may fund a portion of this (protection services), though it would be difficult to see how much they fund (and it probably varies depending on municipality/state). My knowledge of tolls are that they are a good source of funds (and could be considered a good user fee system).
Regardless of this, police and fire protection for automobile related incidents constitute large portions of municipal expenses. Combined with the cost of environmental destruction automobiles create, our current infrastructure’s backlog of repair work (in the trillions), need for foreign oil in corrupt countries, and local roads not being 100% funded through gas taxes/registration user fees; it’s fair to question the automobile’s inability to pay for itself and its impediment on a free-market transportation policy.
One aspect of operating in a free-market economy is understanding the true cost of something. People’s mindset (and thus automobile dependency) would change when they would have to pay, say $10 a gallon vs. $2.00 a gallon. Technically, people are paying somewhere near the $10/gallon mark (not an exactly updated statistic) after all things considered (property taxes, utility fee increases, environmental mitigation, etc.). People just don’t know it because they only pay a certain amount at the pump and associate that with the “actual” cost (perceived cost, really).
Contrasting this, it can be stated that people do the same in regards to mass transit. It is subsidized to try and compete with the other subsidized automobile. Everything is distorted. Decrease the subsidization of the automobile and you increase the viability of mass transit (and ultimately its subsidization levels).
Show the actual costs of the automobile and you will see land-use patterns that actually fit with the market. Everything being equal, you’d still see auto dependent communities, but you’d also see more walkable, pedestrian-oriented neighborhoods serviced by mass transit because it would not be economical to rely solely on the automobile for transportation.
I simply find it insulting when people argue for free-market economics and then point towards automobile transportation as if it were some bastion of this concept. Yes, it does generate a reasonable amount of user fees, but rather than people on this site criticizing the downright infractions the automobile has on a free-market system (and how it can be better); you have hypocritical ideologies fighting mass transit every step of the way.
I can state first hand that mass transit needs to be looked at better, but at least I am cognizant that it is victim of poor public policy that put automobile ridership above sound free-market economics. The whole 40,000 mile interstate system was a huge earmark!
Then what’s the next plan, toll sidewalks?
Has there been any talk of raising the federal gas tax to fund this?
It seems that the highwayman cannot imagine someone writing about a country other than the United States.
I write this column for the National Business Review a New Zealand paper.
So when I say ““The best thing to do with our intercity rail is turn the rail beds into truck and bus lanes†I am talking about New Zealand and only New Zealand – although this assertion is based on a study of UK intercity rail which reached the same conclusion. US trains do a magnificent job carrying freight but these trains running from Chicago to the Coast are traveling thousands of miles and often carry only one cargo.
The whole of New Zealand is about the length of the West Coast and is divided into three islands and our total population is only 4.5 million.
Many of you claim to be planners but I wonder at your training if you take this “one size fits all” approach to planning transport infrastructure. I do not see how closing railway lines and turning them into truck lanes creates a monopoly. It is the rail company which has the monopoly. There are hundreds of trucking companies in NZ as in the US, and of course there is coastal shipping and air freight.
Rail does not carry as much freight in Europe as in America for the same reason of distance being linked to rail efficiency. The US is made for long distance rail freight as are Australia and Russia.
Most countries are not.
Maybe its time some of you got a passport.
I know of that bogus IEA anti-railway study from the UK as well.
More government spending yeah. That’s the way to go. Big gov is so great & does so much. They are so efficient & make so many great products. With all levels of gov being about 38% of the GDP, that is not enough. Let’s raise taxes more so we can pay for the glorious public goods.
Seriously folks. There is no easy answer. It’s certainly not public spending. Reduced taxes & fewer regulations are necessary. Government is not the solution, but the problem. Gov needs to get out of the way & let business & individuals lead the way via the profit motive.
It’s going to tough with a socialistic-leaning guy in the White House now, & he’s hiring many like-minded people to his administration.
“Seriously folks. There is no easy answer. It’s certainly not public spending. Reduced taxes & fewer regulations are necessary. Government is not the solution, but the problem. Gov needs to get out of the way & let business & individuals lead the way via the profit motive.”
see: ENRON, Madov, etc. etc.
Reduced taxes & fewer regulations are necessary. Government is not the solution, but the problem. Gov needs to get out of the way & let business & individuals lead the way via the profit motive.
That ideology was shown the door because we found it didn’t work.
DS
bennett: As for Enron, that’s a ridiculous comparison. It’s one company out of millions in a $13 trillion economy. Please see things in perspective. Enron falsified many things. You cannot blame all businesses for them braking the law.
Madoff was fraudulent & should be executed.
It’s too bad that some individuals & businesses cheat & they should be jailed & or terminated. The vast majority of businesses & people follow ethics & the law; they should not be given punishment for others. Why would you want to do that?
Anyway, how have those few persons & businesses caused the crisis? They did not. It is true that some loan brokers falsified borrowers’ incomes; it was still those people who defaulted who agreed to an obligation to pay the monthly mortgage.
The crisis is here mainly because some individuals over-extended themselves & bought housing at inflated prices & then decided to renege on the mortgages.
Please educate yourself before making gross exaggerations about many based upon a very few. Are you racist too?
Dan: The laissez faire ideology has NOT been used recently. Government has grown over 50% during Bush’s terms. The mess is here because local policies drove up home prices & Congress wanted more loans given out for homes. Please try to understand reality.
Scott Says:
More government spending yeah. That’s the way to go. Big gov is so great & does so much. They are so efficient & make so many great products. With all levels of gov being about 38% of the GDP, that is not enough. Let’s raise taxes more so we can pay for the glorious public goods.
THWM: Our road system is a big government endeavor.
Scott: Seriously folks. There is no easy answer.
THWM: That is for sure.
Scott: It’s certainly not public spending. Reduced taxes & fewer regulations are necessary.
THWM: That depends on where and what kind of regulation.
Scott: Government is not the solution, but the problem. Gov needs to get out of the way & let business & individuals lead the way via the profit motive.
THWM: That’s complicated too. It’s 2009, not 1909 things are now more distorted.
Re:highwayman:
The big road system does not need big government, costing about $150 billion per year out of almost $5 trillion for total gov expenses. Over 2/3 of the road expenses are paid for by user fees.
~”Regulation & big spending depends” Huh? Must you be so eloquent?
What the heck does 1909 have to do with anything? BTW, gov expenses then were, roughly, about 5% of GDP. We certainly don’t need gov to be the 38% of the GDP. The more gov takes (incl.borrowing), the less available for consumers.
If you want to live under socialism, please don’t force others & try to take away freedoms.
Scott Says:
The big road system does not need big government, costing about $150 billion per year out of almost $5 trillion for total gov expenses. Over 2/3 of the road expenses are paid for by user fees.
THWM: Well less than 2% of the roads in the US are freeways.
Though at the same time do you worry about the street in front of your house be closed, because it didn’t make a profit?
Scott: What the heck does 1909 have to do with anything? BTW, gov expenses then were, roughly, about 5% of GDP. We certainly don’t need gov to be the 38% of the GDP. The more gov takes (incl.borrowing), the less available for consumers.
THWM: I know, that is one of the biggest ironies that I find with a lot of people that call them selves “libertarians”.
Just imagine if Mr.O’Toole had to find a real job, instead of being a lobbyist.
Scott: If you want to live under socialism, please don’t force others & try to take away freedoms.
THWM: Pardon the pun. It’s a two way street.