HIGH SPEED RAIL BOONDOGGLE
Like almost all government infrastructure projects, the President’s high speed rail plan has proven to be an enormous boondoggle. In 2008, the President announced plans for a joint federal-state-private sector project that would construct bullet train rail service in ten corridors around the United States. The President earmarked $8 billion for the project. Now, four years later, almost every state originally interested in the program has bailed out, unable to afford its share of the cost—almost all, but not California. California wants all the federal money rejected by the other states to be devoted entirely for its high speed rail train planned to link Los Angeles with San Francisco.
Congressman Kevin McCarthy (R-CA) wants to kill the project. He and other house members are calling for a Government Accountability Office audit which they think will assuredly show that the proposal is a massive financial black hole, drawing ever greater dollars to finance one of the greatest boondoggles in United States’ history.
For their part, the President and the Vice President continue to advocate high speed rail, quite jolly in their view that consumers want the trains and need them. In fact, however, there is little consumer interest in the programs and considerable doubt that consumers will ride the trains. One primary problem is that to reach top speeds of over two hundred miles an hour requires straight through transportation, when consumers are more interested in multiple stops.
The California project is an excellent case in point. Communities along the rail route have been objecting to the plan because it would permit passengers to get on and off the train at just two points, Los Angeles and San Francisco, but if more stops are added, the train will not be able to reach high speed and the entire investment in high speed rail will be a waste.
Evidence now strongly suggests that government projections of ridership for the California high speed rail are grossly inflated. Initial cost estimates were in the $33 billion range. Now the California project is estimated to cost $98 billion, but no one knows for sure what the ultimate price tag will be. Moreover, estimates of the cost of government subsidies needed to make tickets affordable are skyrocketing. It is now estimated that for each trip the government would have to pay about $100 per passenger. In addition, construction of the rail is now estimated to require an additional thirteen years, thus causing it to be completed at a time when no one presently can anticipate relative demand.
Original estimates were that the California high speed rail project would employ one million people. Now, government planners admit that it is more likely that several thousand people will be employed, nowhere near the million employee projection originally given.
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The high speed rail boondoggle is all too typical of this administration. Grandiose concepts of government planned economies abound at the White House. Obamacare is another horrendous government planned approach that is presently riddled with projected financing problems and market dislocation effects that could well force all health insurance premiums through the roof.
Although history is replete with dozens of examples of how and why planned economies fail, politicians remain addicted to grandiose promises, committing the government to them, and then letting others worry about how to afford them. That pattern has brought us to our present financial crisis and will keep that crisis going until the public throws the big spenders out of office.
© 2012 Jonathan W. Emord - All Rights Reserved