Congress is wrangling over how to spend federal gas taxes, with the Senate wanting to spend about $15 billion per year more than revenues while the House modestly wants to spend only about $10 billion per year more than revenues. But according to the Congressional Budget Office, the money they have to argue about will soon dramatically decline.
Obama’s fuel economy rules, the CBO says, will reduce per-mile fuel consumption faster than the increase in driving. As a result, by 2040 total gas tax revenues will decline by more than 20 percent. That means less money for highways, transit, bike paths, and whatever else Congress wants to spend the so-called Highway Trust Fund on.
The House and Senate conference committee will begin meeting on May 8 to iron out the differences between the bill that passed the Senate and the one that passed the House Transportation Committee but not the full House. Republican members on the House side include Mica (FL), Duncan (TN), Young (AK), Hanna (NY), Shuster (PA), Capito (WV), Crawford (AR), Beutler (WA), Cravaack (MN), Ribble (WI), Buschon (IN), Southerland (FL), Lankford (OK), Camp (MI), Tiberi (OH), Hastings (WA), Bishop (UT), Upton (MI), Whitfield (KY), and Hall (TX). Several of them, including Mica, Shuster, and Young, are known to be fond of pork barrel.
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Democrats include Rahall (WV), DeFazio (OR), Nadler (NY), Boswell (IA), Brown (FL), Johnson (TX), Cummings (MD), Bishop (NY), Costello (IL), Norton (DC), Blumenauer (OR), Markey (MA), and Waxman (CA). DeFazio and Blumenauer, at least, are hard-core smart-growth advocates. Many Senate conferees are as well. So the Antiplanner doesn’t have much hope that the committee will produce a fiscally conservative bill.
I’ve long maintained that the real problem with transportation is too much money, most of it poorly spent. The only thing that may save America’s transportation systems is running out of money.
The only thing that may save America’s transportation systems is running out of money.
This is similar to the contention by many Austrian economists (save me the hand-waving, Danny Boy), that the federal budget problems will only be solved, and control returned to local areas, when the federal government runs out of money and defaults.
The Federal Government runs a bank with unlimited amounts of funds that can never be exhausted because they are created by computer keystroke, and owns a printing press and coinage mint. It cannot run out of money since it is the creator of all US money in existence through deficit spending and minting of coinage.
Because of this, it is impossible for the US government to default except through the legislature tying the hands of the Treasury to prevent it from using its constitutionally inherent monetary powers.
When our country was founded, there were zero dollars in existence. Every single dollar in existence today was spent into existence by the Treasury or minted from metal ore mined from the ground and brought to the mint under the regime of free coinage.
Your much beloved private sector does not and cannot create money. The creation of the necessary amount of money for a functioning modern economy is one of the primary reasons we have a government.
The Federal Government runs a bank with unlimited amounts of funds that can never be exhausted…
Why not give ever single American their own billion-dollar stimulus then?
A serious question.
Why not a billion dollar stimulus? Because money supplied needs to be proportional to economic demand or else prices are bid up.
Bush and Obama each sent out checks for a few hundred dollars created out of nothing.
Overall annual government deficits since 1982 have been the equivalent of a $500 to $4000 currency issue per person per year. Especially if we consider that because we try to make investments in capital assets and military hardware pay for themselves from income taxes and user fees, the deficit is essentially run up to permit welfare, medical, and social security spending.
A surplus, of course does the reverse – extracting additional financial resources from the populace and basically incinerating the extra dollars collected.
Andrew,
What you say is not contrary to the Austrian analysis which Metrosucks posits. Defaults can take several forms:
1. The facile example of a refusal to pay the interest or principal(unlikely).
2. Renegotiation of government obligations, i.e the government negotiates to pay less than what they agreed in the first place(happening soon).
3. Finally, the government can default by running the printing press, devaluing or destroying the currency and meeting obligation with devalued currency(could still happen).
In each case the government defaults, because in each case the government pays less than agreed and faith in the government or the currency is destroyed.
Money is just a means of exchange.
Wave $20 in front of a dog and it isn’t going to bite.
Wave a piece of steak and it will!
“Your much beloved private sector does not and cannot create money. The creation of the necessary amount of money for a functioning modern economy is one of the primary reasons we have a government.”
You have absolutely no basis to make such statements. The private sector is perfectly capable of creating money — and plenty of it — if only the government would permit it. Gold and silver are the perfect examples. They were used as money for centuries before governments stepped in to control [and profit by] them.
Money is nothing but a medium of exchange. People will always find one (or several.) Government need not and, indeed, should not concern itself with the matter.
Andrew is going to find his faith in government’s “ability” to endlessly “create” money rather misplaced in the next decade.
You have absolutely no basis to make such statements. The private sector is perfectly capable of creating money — and plenty of it — if only the government would permit it. Gold and silver are the perfect examples. They were used as money for centuries before governments stepped in to control [and profit by] them.
Gold and silver were made into money by governments that stamped their images on the coin and decreed them legal tender to pay debts and taxes. Luke 20.24. Not vice-versa. Gold and silver had no intrinsic value in days of yore, unlike copper or tin or iron.
Our Constituion forbids anyone but our federal government from creating money, and gives it the power to not only create it, but to regulate its value.
Yes, anybody “could” create money ex nihilo. Anybody could also conduct foreign affairs, start private wars, and mete out private justice through vigilantism. Most of us recognize such a situation as a dangerous society of lawlessness and know that to prevent such situations is why we form governments instead of resorting to piracy, brigandry, and anarchy.
As to gold and silver, they have rarely functioned as the actual monetary supply due to their scarcity and weight. Most money has normally been debt instruments represented by various types of chits, checks, and I.O.U.s, such as the ancient Tally Stick. The American colonies were early users of paper money issued as land backed mortgage currency.
“Our Constituion forbids anyone but our federal government from creating money, and gives it the power to not only create it, but to regulate its value.”
I don’t think so. Section 10 of says this:
“1: No State shall … coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts …”
And Section 8 says this:
“5: To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
6: To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;”
I don’t think any of that covers privately issued money that is not intended to counterfeit US government money.
Don’t bother, Andrew seems to believe that government has magical abilities concerning money.
Government prohibits anyone but themselves from printing money. They ”make” money but individuals create wealth.
They â€make†money but individuals create wealth.
Individuals acting on their own won’t get very far in wealth creating.
If accumulated national wealth is the net surplus accumulated by a country over time, the only way this can occur is by the government injecting money into an economy by spending more than it taxes, or by the country running a consistent trade surplus where other countries necessarily run a deficit. The latter method accumulates foreign financial assets, but in reality represents a net drain on the production of the country to the detriment of its citizens standards of living – for example, China.
True national wealth on an historic scale is exampled by countries such as the US or Rome which had the power of creating money through government spending and using it to purchase the surplus of its vassals to enhance the lifestyle of the citizenry.
For reasons I cannot fathom, some people seem to think it is horrible that we print up little bits of paper with green ink and send them overseas in exchange for real goods like oil, copper, iron, manufactured products. It sounds like a fantastic deal to me.
The Antiplanner wrote:
Obama’s fuel economy rules, the CBO says, will reduce per-mile fuel consumption faster than the increase in driving. As a result, by 2040 total gas tax revenues will decline by more than 20 percent. That means less money for highways, transit, bike paths, and whatever else Congress wants to spend the so-called Highway Trust Fund on.
Classic example of “be careful what you ask for, because you just might get it.”
But don’t forget that it is not just vehicles powered by gasoline and ethanol that pay federal and state motor fuel taxes. Vehicles powered by Diesel fuel also pay those taxes.
I would love to hear promoters of transit explain what taxes would be used to fund transit capital subsidies and operating subsidies if (by some chance) transit were to achieve what its fans so desperately want – a large-scale shift from rubber-tired vehicles driving on the highway network to rail transit and buses.
“I would love to hear promoters of transit explain what taxes would be used to fund transit capital subsidies and operating subsidies if (by some chance) transit were to achieve what its fans so desperately want – a large-scale shift from rubber-tired vehicles driving on the highway network to rail transit and buses.”
The answer is user fees – transit is very profitable indeed if enough people use it, and the tram networks in the UK were run privately for a while, before the local councils bought them out.
But, short of a new pressure or a radical rethink, this will not happen. In the 1920s, the USA had wall-to-wall trams, and they still went out of business.
And I can recall one specific instance where the tram (or streetcar, in U.S.-speak) line was shut-down and replaced with buses exactly because the demand was so high that the streetcars could not service the load.
That example being the H Street, N.E./Benning Road, N.E. line in Washington, D.C.
Streetcar service in that corridor was such a success that the cars were severely congested on their tracks, and were gridlocking the streets for rubber-tired vehicles as well.
So in 1947, the line was shut-down and replaced with buses.
Excellent points, CP. Would also love an explanation as to what transit promoters were to do for funding if car use dramatically declined. I imagine they hope for new laws transferring tax funding of some sort directly to them.
That makes no sense, that would have sent labor costs way up. If there were more people riding the line then what would have been needed were longer streetcars.
O’Toole even admitted it him self; “Roads are there regardless of economic conditions.”
Just as when rail lines are lost, it’s a result of politics, not economics.
Hmmmmmmmmmm. So the gas tax isn’t a user fee after all. Sounds like a mileage tax may be in the wings.
Your are correct!
The gas tax is not a user fee for light rail, streetcars buses, bike paths and amenities, beautification projects, museums pedestrian projects and other non auto and truck boondoggles.
Though roads are mostly funded through property taxes.
“I’ve long maintained that the real problem with transportation is too much money, most of it poorly spent. The only thing that may save America’s transportation systems is running out of money.”
So Obama’s fuel economy rules are a win win for you? I’m surprised to hear such praise for top down government mandates 😉
Not sure that’s what Randal meant; maybe he implied there would be a beneficial (?) side-effect that wasn’t intended (??)
I am surprised the Antiplanner fell for the typical planner story that planners can predict the future. The planners used a straight edge to graph the future until 2040.
But if driving uses less gas, and thus is cheaper, then there is a great probability that people will drive more. Add that to the DC law that pork always gets fed, and you can’t believe that projection.
I am surprised the Antiplanner fell for the typical planner story that planners can predict the future. The planners used a straight edge to graph the future until 2040.
Planners cannot predict the future.
But planners can develop forecasts of demand for highway and transit capacity in the future, especially if the planning process uses reasonable estimates of future employment, resident population and number of households in a metropolitan region.
Those forecasts are even more critical if we are to finance future improvements to the highway network from the private sector (either with public-sector agencies building toll roads using revenue bonds to be repaid out of tolls, or if the private sector will build and operate toll roads through concession agreements, as is done in France and some other countries).
Great points. I think critics sometimes forget that the Antiplanner isn’t against planning; he’s against government planning, which often leads to political outcomes that waste money and don’t fix the issues they’re supposed to.
Your life – planned by bankers and Wall Street or your democratically elected government.
Take your pick.
No no no. He’s only anti-government planning when it doesn’t result in the exact outcome he wants. There are plenty of heavy handed, top down governmental planning initiatives that Mr. O’Toole absolutely loves (big houses on big lots, the interstate system, etc.).
The main ideological difference between these outcomes and other government planning initiatives that he opposes is that after you snort the libertarian angle dust everything the government does that you like magically becomes the result of self interested individuals operating within the free market. “Woohhhh bro, check out that invisible hand.” 😉
No, you and O’Toole are against selective government planning.
With you it’s always 4 lanes good, 2 tracks bad.
Your life – planned by bankers and Wall Street or your democratically elected government. Take your pick.
One could make an excellent argument that the unprecedented transfer of wealth and treasure and resources into the hands of just a few people is precisely because we allowed finance to “guide” our economy. Lack of controls on these people is hastening our decline.
DS
We’re talking about planning here, as in, highways/cities/etc. Not Wall Street, the Koch Brothers, or whatever other bogeyman Danny Boy fears currently.
Your life – planned by bankers and Wall Street or your democratically elected government.
Wow, talk about a false dichotomy. Last I looked, Goldman & Sachs wasn’t trying to get me to drive less by making it inconvenient, or taxing me to hell & back to pay for city-center glorifying light rail/streetcars/stadiums/etc. No sir, this is all the work my of my local, “democratically” elected government, which doesn’t listen to what we in the suburbs want, and doesn’t give a cr*p either way.
No, I don’t agree with what the big banks are doing, but even given your false dichotomy, I’ll take the banks running my neighborhood over the local planning hooligans, any day. Even as big as these banks are, and as (ostensibly) powerful as they are, they are still competing for my business all day and greeting me with a smile when I walk into their offices. Compare to the usual DMV/planning office interaction and get back to me.
There are plenty of heavy handed, top down governmental planning initiatives that Mr. O’Toole absolutely loves (big houses on big lots, the interstate system, etc.)
Given that I usually respect your contribution to the discussion, I must say that this statement is lacking in evidence or truthfulness on the level of a Dan ideological whopper. No one is being forced to live on a big house on a big lot (government is attempting quite the opposite, in fact, as we all know), and the Interstate system almost completely paid for itself out of user fees, something we cannot say for a single transit system in the US. Please step up your game, Bennett, and don’t stoop to Dan’s or highwayman’s level.
“No one is being forced to live on a big house on a big lot (government is attempting quite the opposite, in fact, as we all know)”
Ever heard of euclidian zoning? Try building something different in an area zoned for big houses on big lots. Government is (mostly) attempting to allow for other types of development than ones that require strict separation of uses. Has uncle Sam come to your house, put a gun to your head and moved you into an apartment building, or is it that you libertarian hyperbole knows no bounds?
“…the Interstate system almost completely paid for itself out of user fees…”
And yet it is the direct result of… wait for it… GOVERNMENT PLANNING!!! That’s my point. Y’all aren’t anti planning, your only anti planning when it results in what you don’t approve of. Welcome to the club. Democracy is a bitch sometimes.
“Bennett, and don’t stoop to Dan’s or highwayman’s level.”
My use of ” 😉 ” was a sign that comment was intended to be taken as tongue and cheek. There a little truth to it, as explained above, but the “libertarian angel dust,” and “invisible hand,” blast was just a joke. I can see it struck a nerve, and there wasn’t too much offense intended (just a little).
Try building something different in an area zoned for big houses on big lots
Yes.
The Merkin Dream is increasing housing prices by limiting supply.
DS
metrosucks: Interstate system almost completely paid for itself out of user fees, something we cannot say for a single transit system in the US.
THWM: Bullshit, they make up less than 2% of the roads in the USA and they depend property taxed funded streets for traffic.
Ever heard of euclidian zoning? Try building something different in an area zoned for big houses on big lots
Your point taken, but the fact is, we WANT separation of uses. I sure as heck don’t want a 10 story condo building here in Fairwood-Cascade (Renton, WA), where I live. I currently reside in a 3-story apartment complex, and that’s as dense as I would want in the suburbs, thank you very much. Leave the skyscrapers and mixed use to downtown Seattle, where those who WANT that lifestyle are apt to go anyway.
Whenever these high density/mixed use projects are tried in the suburbs, they almost inevitably become disasters, kept afloat with TIF, property tax abatements, and other accounting tricks that steal money from services the city should be providing.
“…the Interstate system almost completely paid for itself out of user fees…â€
And yet it is the direct result of… wait for it… GOVERNMENT PLANNING!!! That’s my point. And yet, not really. With only several distinct, politically motivated errors, the Interstate system is largely a success that hasn’t been a drain on local taxpayers. So what if government planned it? At least it was the result of the old government planners, you know, the ones who wanted to give residents what they wanted and needed, versus some narcissistic social engineering type that exists today.
If I don’t want to use the Interstate (or cars), I pay little to no of its costs. However, just by living in close proximity to lunatic mixed-used developments such as Renton “the Landing”, I subsidize the city’s current density fetish and developer giveaways.
I see comparing highways/roads and mixed use fantasies as a mistake. Everyone benefits from highways, whether they use them or not. The local ten story mixed use development, subsidized with taxpayer money stolen from schools and fire and police, only benefits the developer, some city council thugs, and the people who got cheaper rents via our pocketbooks. See the difference? That’s why I’m angry about the density scams. They’re not free-market driven, except maybe in some downtowns.
Just as everyone benefits from railroads, whether they use them or not.
http://www.youtube.com/watch?v=Nq4-LizaMrE