Washington is gripped by sequestration fever. Or sequestration chills, depending on the point of view. The White House complains that it’s suffering severe spending withdrawal, and Congress, or at least half of Congress, says it’s suffering the pangs of hunger for more and deeper spending cuts. The spirit of austerity, if not necessarily actual austerity, has spread to California, where self-discipline is against the law, or ought to be. Gov. Jerry Brown, a Democrat, laments that dreaded “fiscal discipline” was imposed by his deep budgetary cuts. If only that were true.
The California High-Speed Rail Authority on Monday approved the sale of $8.6 billion in bonds to be used as a down payment on a $68 billion scheme to build a bullet train like those in Japan and China. President Obama is kicking in another $3 billion in federal taxpayer funds to get the system running between Bakersfield and Merced through California’s Central Valley, which is spectacularly fertile farm land but essentially in the middle of nowhere. If every single resident of Merced, where the per-capita income is $18,304, were to ride this train one hundred times, the ticket price would have to be $2,900 per trip just to cover the cost of the bonds.
Bonds are what enable politicians to build expensive projects today while leaving the full cost as a gift for future generations. Here the interest payments for the train bonds would have been formidable: $54 million a month for 30 years. So Sacramento legislators authorized a 40-year maturity for train bonds, thus reducing the state’s monthly payment to merely $48 million. The extended terms further sends the cost of paying off the bonds soaring to $23.2 billion. Suddenly, the $68 billion deal will cost $81 billion — and that’s before the inevitable cost overruns.
The project’s price tag wasn’t the only whopper told to sell the turkey. Voters were fooled into approving the scheme in 2008 on the promise that they would ride between Los Angeles and San Francisco in 2 hours and 40 minutes for $50. It’s not going to happen. The rail authority on Monday approved a “blended approach” that basically means the “high-speed” trains will ride on the same tracks as the ordinary, low-speed trains. The bullet trains can’t be much faster than low-tech trains.
So the train will travel slowly between two unpopular destinations at a price far in excess of the earliest promises. The more time passes, the less sense this project makes, but the administration remains obsessed with high-speed rail, which it insists is the future of travel. Trains opened the continent in the 19th century, but they’re not as popular now as the automobile, despite crowded highways, or the airplane, despite everything the TSA can do to make air travel a royal pain.
Lawsuits have been filed to derail California’s $81 billion train to nowhere, but time is running out. Once ground breaks on the deal, taxpayers across the country will lose billions even if the project is never finished. The politicians in Sacramento and Washington who really want to save money could start by killing high-speed rail.
The Washington Times
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By Douglas Holtz-Eakin
The young drop coverage to avoid higher premiums