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Blazing Bullet Train: How the Federal Government Enables State Waste

Friday June 29th, 2012   •   Posted by K. Lloyd Billingsley at 10:26am PDT   •  

Southeastern High Speed Trains, St Pancras International

California cannot balance its budget and faces a deficit in the neighborhood of $16 billion. More than 10 percent of California workers are unemployed and the state economy shows few signs of recovery. Yet the state wants to build a bullet train and has established a high-speed rail “authority” for that purpose. If approved it would be one of the largest public works project in history, with cost estimates of $68 billion, down from $100 billion, which likely underestimates the true figure. When government builds something it always costs more, largely because of measures such as Davis-Bacon laws, which alone can increase construction costs by more than 35 percent.

Last month, U.S. Transportation Secretary Ray LaHood made a personal appearance in Sacramento, warning legislators that they need to get going on the bullet train or risk losing $3.3 billion in federal funds. That would not build much track but got the attention of Governor Jerry Brown, who wants to proceed with the bullet train, which he says will keep the United States from falling into Third World status. Such is his ardor that he even wants to exempt the train’s construction from environmental lawsuits.

“The need for a bullet train, however, exists only in the minds of its ardent backers,” notes Dan Walters of the Sacramento Bee. As he explains, the state’s north-south highways are not congested and air service is frequent and cheap.

Brown is comparing the bullet train to the Golden Gate Bridge, which did meet a legitimate need, and which California paid for all by itself. Walters observes that “Brown wants the federal government to pony up nearly two-thirds of the bullet train’s construction cost, whatever it might be. . . Or, in reality, he wants a federal government that’s running up monumental deficits to borrow even more for California.”

That makes little sense. If the federal government wants to show leadership it should get its own house in order and oppose state boondoggle projects instead of enabling them. In this case, as Alex Karras said in Blazing Saddles, it all has to do “with where choo-choo go.” That politically incorrect movie, which could not be made today, teaches another economic lesson.

When the devious Hedley Lamarr ponders how to grab land for his railroad, he laments that only one thing stands between him and that property: “the rightful owners.” On that theme see Property Rights: Eminent Domain and Regulatory Takings Re-examined.

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June 2012