Californians Will Go Into Debt For About Anything
Incredibly, it looks like Proposition 1A in California is going to pass. This act authorizes a $9 billion dollar bond issue to start a high-speed rail passenger line from the Bay Area to the LA Area.
Why do I say "start." Because even the line's supporters put the minimum cost at $40 billion, so the taxpayers have authorized 22% of the line. And this is by supporters numbers. By my numbers they have likely authorized less than 10% of the line.
I wonder if voters knew they were authorizing either a) $40-$100 billion, in effect, rather than $9 billion; or b) a $9 billion white elephant of a rail line that ends up incomplete and going nowhere or c) something that is not really high speed rail and therefore not different from Amtrak service that already exists. (What are you talking about Coyote, government transit people would never begin a project without full funding and leave an orphaned white elephant in place.)
The state that makes up a huge percentage of the current mortgage and
foreclosure problem seems to not have learned its lesson about
borrowing.
I am generally an optimistic guy, but I wonder if we have gotten to the point where there is a large subset of the population for whom voting is solely for the purposes of boosting self-esteem. I feel good when I support public transit, so I vote for Prop 1A, despite the fact there is no possible way it will ever deliver any public transit.
morganovich:
as a CA resident, i can tell you: this is appalling. there is no plan, nor responsibility built into this. given that the bay bridge retrofit is currently several multiples over budget, i have zero faith this will work. somehow, "bond" does not seem to mean "money" to CA voters. they just see neat stuff and want it. at least we voted down the ludicrous alt energy props. but prop 8 (same sex marriage) looking like it will win (thereby banning same sex marriage), so a poor day for libertarians for the most part...
November 5, 2008, 10:57 amnicole:
I am generally an optimistic guy, but I wonder if we have gotten to the point where there is a large subset of the population for whom voting is solely for the purposes of boosting self-esteem.
Bryan Caplan would say this is just about the only reason people vote. Have you checked out his book The Myth of the Rational Voter? It is great on this subject--and by great I mean depressing. Somehow though I am actually surprised California approved this. Must be serious lack of knowledge, just see "high-speed rail" and think "yay!"
November 5, 2008, 11:15 amCaptain Obviousness:
Just unfathomable to me how stupid people are. It should be illegal for bond measures to claim they don't require new taxes. How are we going to magically pay back $15 billion in principal and interest without raising taxes, when the state is already in the red? Not to mention that the project is sure to go overbudget.
I think the entire initiative/proposition system needs to be revamped. I wouldn't do away with it entirely, but it's ridiculous that we can amend our constitution with only 50% of the vote. Aren't constitutions designed in part to protect against tyranny of the majority? Anything that raises taxes (like bond measures), amends the constitution, or otherwise takes rights away from people should require a 2/3 majority to pass. Populist pandering tricks too many people for 50% to be the only hurdle to new taxes or changing the constitution.
November 5, 2008, 11:23 amGU:
http://www.theonion.com/content/node/38644
How many people would actually use this? As someone who both lives in LA and takes public transportation daily, I find it hard to believe that there is enough of a market for this service. The bus I take costs only 25 cents a ride, yet still is rarely even close to full. The drive from LA to SF isn't that bad, and it isn't that hard to find a cheap flight either.
November 5, 2008, 11:30 amdeluking:
Coyote wrote:
"The state that makes up a huge percentage of the current mortgage and foreclosure problem seems to not have learned its lesson about borrowing."
I disagree. They learned the lesson perfectly well. You borrow more than you afford then you get a federal government bailout. If you don't borrow enough, you don't get the bailout.
November 5, 2008, 12:10 pmCTD:
I wonder if we have gotten to the point where there is a large subset of the population for whom voting is solely for the purposes of boosting self-esteem
Make a "large subset" into a "depressingly large majority" and you're on to something. For progressives, especially, I see this all the time in people I know. If some "education" measure is on the ballot, for instance, they are flummoxed that ANYBODY would vote against it. "Education is great! How can you not want more education?" they ask. It's painfully obvious that the question of whether or not said measure will actually DO anything has never crossed their minds once. They don't even think to ask it.
November 5, 2008, 1:53 pmK:
deluking has it right.
Debt don't matter. A California conservative is someone who expects the feds to pay state debts. A CA liberal thinks the feds should pay both state and personal debts. A CA progressive thinks the debts will be paid by someone else because CA progressives are such good people.
A CA realist knows the coming Mexican government will declare all the debts null because the wording was not in Spanish.
November 5, 2008, 3:20 pmFrederick Davies:
I too recommend you read "The Myth of the Rational Voter" by Bryan Caplan; it does explain a lot!
November 5, 2008, 3:25 pmCorky Boyd:
Here in Florida we went through a similar situation. It was such a potential financial disaster to the state it had to be overriden by a contitutional amendment to undo the original constitutional amendment mandating it. Fortunately our governor at the time was Jeb Bush who had the guts to call a halt to it. He also made sure that any future amendments have the financial consequences spelled out on the ballot.
Aside from some very naive financial suppositions, many other problem developed. Originally planners designed the rail roadbed to be sited in the median of Interstate from Tampa and Orlando. The only problem was Interstates have half to three quarter mile radii on their curves and high speed rail (They were planning for 200 mph peak system) needs 3 to 4 mile radii. Then there were political problems of the stops in Orlando. The original plan was for a stop at Disney World and the airport. Plans were changed for a third stop so other tourist would benefit also. Now each stop means the loss of about 7 minutes for a stop (time lost decelerating, the actual stop itself, and time lost accelerating back to speed).
There are other endemic problems with high speed rail. The speeds mandate there be no grade crossings. There are none in Europe or Japan. All crossings must be bridged, either over and under and that is expensive. Rights of way can't be jinked a couple of hundred yards, as with highways, to avoid expensive structures. They have to be removed.
But the real problem is there was simply no demand for it. For someone who wanted to go from Tampa to Miami, there are plenty of flights, most around an hour as opposed to 2.5 to 3 hours for rail. But better yet, it is simpler to drive and takes less than 4.5 hours. With your own car you don't pay parking at the origination point and you dont need to rent a car or pay a taxi at the destination end.
I have never understood California. They are not coming close to meeting their budget and they borrow $10 B for a pig in a poke because it sounds right.
November 5, 2008, 9:38 pmBob Smith:
With super-cheap Southwest flights between LA and SF why would anybody want to take rail? More to the point, in what world does anybody want to build rail when expanding the airports would be so much cheaper because you don't have to build anything in between them?
November 5, 2008, 11:11 pmdamaged justice:
With super-cheap Southwest flights between LA and SF why would anybody want to take rail?
For the same reason people choose to drive rather than fly: To avoid the "security theater" that does nothing whatsoever to reduce terrorism, and everything to further acclimatize people to following whatever orders are given by some chimp in a uniform.
November 6, 2008, 7:44 amDKN:
More and more, Bread and Circuses is what the voters want. And they are willing to pay an arm and a leg for "free" Bread and Circuses.
Serfdom is the natural state of man.
Yeah, I'm feeling a bit pessimistic after this election.
November 6, 2008, 11:36 amMichelle:
Even though I am a Californian, I have to agree this is lunacy. To quote a cartoon, "I don't think this plan was thought out very well". This sort of thing will never pay for itself and I can't fathom that there would be enough people who would ride it to justify even starting it. I hope it gets killed early like the Florida rail project. The generalization that Californians are looking for a free ride from the government is pretty accurate; it's a "Blue" state. I voted Libertarian...
November 6, 2008, 12:45 pmPalinDrone:
Every problem should be seen as an opportunity ...
November 6, 2008, 12:48 pmK:
A news story on Drudge says CA is running a deficit of $2B/week of the five weeks since Arnie signed the new budget.
While that is no doubt an exaggeration we can't doubt CA is headed for disaster.
Some of the following may be dated. I left CA years ago.
The law requires the state budget be balanced when passed. Increasingly that has been a pretense. The "balancing" being done by borrowing and by understating how much is certain to be spent.
With same balancing method our federal budgets could be defined as balanced too.
Agreeable estimates of future revenues help in the balancing. Said revenue estimates are prepared "independently." I want to believe that.
In any case, honest or not, the revenue estimates have been trashed by the deteriorating economy.
There is no CA requirement that spending actually stay within budget. The state controller can exercise a lot of clout but normally just looks the other way.
Don't reserve your train tickets yet. What lunatics would loan them $9B for this Magical Mystery Turd?
November 6, 2008, 11:52 pmTDK:
Just to give you some comparison figures. The UK line from St Pancras Station, London to Ebbsfleet, Kent (Channel Tunnel Rail link Phase 2) is about 38km long (23.6 miles) and was reported to have cost 5.2bn pounds or about 8.2bn dollars. Phase 1 was completed many years earlier.
This story gives those figures but also shows additional figures for major stations rebuilding at various sites.
-St Pancras remodelling - £600m
-Ebbsfleet International - £100m
-Stratford International - £210m
-Stratford City - £4bn
-King's Cross redevelopment - £37.5m
I suspect that these costs have to be added on although I guess the last two might be considered separately given that redevelopment might have happened independently of the railway. Stratford is where the 2012 Olympics is going to be held. Let's be safe and ignore these figures entirely.
$8.2bn gives a route cost of $0.35bn/mile, which assuming 800 miles comes to a total cost of $278bn excluding stations.
Of course an allowance has to be made for the fact that non urban miles would be cheaper. However, the California location would require higher engineering standards to tolerate earthquakes (not a problem in London). Additionally we should note that the incumbent UK government has massively overrun on several high profile projects during its office (eg NHS computer, Millennium dome). The resulting negative publicity would be something it was keen to avoid, which would tend to encourage creative accounting (ie. allocate costs to other projects). Thus the 5.2bn should be seen as a low figure. [Incidentally I doubt a different government would behave better - it's a feature of statism.]
So I would estimate a figure of $200bn plus
November 7, 2008, 4:20 amTDK:
Incidentally, I got the 800 miles from Anti planner. That link was lost
November 7, 2008, 4:24 am