Thursday, February 17, 2011

Who pays and who plays on high-speed rail?

Here is Fox News' calculator to determine what each of our shares of the tax burden would be based on our tax category and income to pay for high-speed rail in America.  Perhaps this is a valid gizmo, perhaps it isn't.  I'm not smart enough to tell. 

Whether pro- or anti-Fox News, (I'm anti-) there should be no doubt that each and every tax payer in the US is on the hook for this train if the Administration gets it way with their inclusion of $53 billion over six years for HSR within the DOT budget.

In one article this morning I learned that the federal government is paying interest on our interest, our debt is so extensive.  Also, it should be clear that the $53 billion is no more than a down payment, the same way that the ARRA stimulus $8 billion have been.  

We face the problem that while the states are not allowed to go bankrupt and must balance their budgets, that is not the case with the federal government which can run up the debt indefinitely or until the economy of the country collapses, whichever comes first. (joke!) Our Congress is debating the raising of our debt ceiling yet again; sky's the limit!  As I like to ask, "What could possibly go wrong?" 

At the national level, the HSR program will cost well over one trillion dollars.  The California project, if ever fully built out, will cost $100 billion or more.  Calling all this "investment" doesn't make it smart or guarantee all the grandiose payback promised by the rail promoters.  To the contrary, those who have done their homework understand that all the funding for HSR construction will be money down the rat-hole. 

How's this?  When Gov. Scott turned down the federal funding for HSR in Florida, a lot of organizations, such as the labor unions, got upset.  Among others getting upset are Siemens and Alstom, the German and French HSR manufacturers.  Excuse me?  Foreign corporations upset since they had counted on huge profits at American taxpayers' expense and now they can't?  Well, I am sooo sorry!

When Wendell Cox is quoted as saying that, "It doesn't work in most of the rest of the world," what he means is that regardless of the numbers of passengers using it, the rail system can't be cost/effective.  The full-cost accounting of each train seat moving from point A to point B is stunningly high on HSR, which increases in costs dramatically with increased speed; it is doomed to be a permanent drain on the host governments. 

Also, no matter how many people can reasonably be expected to use this train, it will always remain a miniscule fraction of the total travelling population.  HSR is the top of the line, luxury and premium version of passenger railroading, not unlike the Orient Express, which by the way is private and profitable.  But, of course the ticket costs are outrageous. (Just for fun, try booking a ticket to see what it costs.) 

For the US high-speed trains, beginning in California, it's the taxpayer that will have to shoulder the burden of not only building it, but paying huge subsidies to keep it operating.  That's ridiculous.

Published on Fox News (

Taxpayer Calculator: High-Speed Rail

By Craig Schulz
Created 2011-02-17 06:00

Among the line items in the $3.7 trillion budget blueprint President Obama outlined this week is a six-year $53 billion investment in a national high-speed intercity passenger rail network.

The Administration is pushing ahead with its plan to give 80 percent of Americans access to high-speed rail within 25 years, despite the rejection of federal funds from newly-elected Republican governors in Wisconsin, Ohio and now Florida.

"Ridership and revenue projections are historically overly-optimistic and would likely result in ongoing subsidies that state taxpayers would have to incur," Governor Rick Scott [2], R-Fla., said in announcing his opposition to Obama's plan.

Scott's rejection is particularly upsetting to rail advocates, many of whom saw the Florida project, along with one in California, as one of the nation's most viable. President Obama himself went to Tampa immediately following his first State of the Union address in January 2010 to announce $1.25 billion in federal stimulus funds for the Florida project and an $8 billion down payment on other projects nationwide.

"It is projects like these that will help America out-build our global competitors and lay the foundation needed to win the future," said Transportation Secretary Ray LaHood [3]. "This project could have supported thousands of good-paying jobs for Floridians and helped grow Florida businesses, all while alleviating congestion on Florida's highways."

But with such a high price tag, even some transportation advocates fear the administration has rail envy after seeing what Europe and China have been able to do. Wendell Cox, who has advised local and state governments on transportation issues for decades, questions the benefits high-speed rail would have on other modes of transportation, and says such a large sum of money would be better spent elsewhere.

"It doesn't work in most of the rest of the world," Cox said. "It's not just the demographics of the U.S., it is just very expensive technology, it doesn't reduce traffic congestion and it doesn't reduce airline congestion."

Do you think high-speed rail is worth the public investment? Check out our Taxpayer Calculator [1] for an up-close look at how much of your tax contribution is paying for this project, then vote on whether or not you think the money is being well spent.