That’s how I would describe Obama’s presidency so far. Obama’s most recent bout of cluelessness is his plan for a high speed rail. I’ve written about this in recent posts, and I have yet to see any concrete evidence that this makes any sort of economic sense. The most recent editorial in The Wall Street Journal continues to highlight how asinine this proposal is. All it will do is increase the budget deficit and create further spending obligations for all levels of government to subsidize a rail system that likely will not pay its own way. We don’t need more useless spending. We need less, especially less of the kind that creates recurring burdens on our budgets for the foreseeable future. Obama just doesn’t get it…
High-Speed Spending
This train is going to Disney World no matter what it costs.
Next to national health care, no liberal dream has lingered longer in the nation’s public policy than high-speed rail. No surprise that it hit the ground in President Obama’s State of the Union speech.
Like health care, the justifications shift with the political winds. High-speed rail’s current rationale, needless to say, is jobs. Unlike real jobs created by the private sector, taxpayers get to pay for those in high-speed rail. Let’s look at the Orlando-to-Tampa proposal.
Start with the number Mr. Obama attached to an Orlando-Tampa high-speed railway: $1.25 billion. That’s a lot but cannot possibly be the bottom line. With rail, it never is. Florida voters know it too.
High-speed rail has a long history in Florida dating to 1982 when the governor established a development committee. Florida has since nixed high-speed rail three times because of costs. In 2004, voters repealed a 2000 ballot initiative requiring the state to build a high-speed rail system because they didn’t want to foot the bill.
You would think this nearly 30-year history of rejection would send a signal to the train lobby, but with the Obama revival, it’s back. The Florida Department of Transportation estimates the Tampa-Orlando project will cost $3.5 billion. But according to a 2009 GAO report, new high-speed rail projects in France, Spain and Japan average $51 million per mile. You read that right—$51 million per mile. That would put the cost of the Tampa-Orlando line at $4.28 billion. Which means the state will be on the hook for $3 billion.
The president of Florida Transportation Builders Association Bob Burleson has said the state legislature doesn’t have much appetite for building and maintaining a high-speed rail system just now, as it already has cut funding for transportation projects this year.
The private sector doesn’t want to invest because of uncertainty about costs and ridership. The state projects ridership at between 1.9 and three million a year, but as the GAO dryly notes, “a systematic problem and incentive to be optimistic may exist” in forecasts of profitability based on ridership and costs.
Internationally, only two high-speed railways have managed to pay off their capital costs with ticket revenue, and Europe and Japan are better suited for intercity high-speed rail than the 84-mile stretch between Tampa and Orlando. The Congressional Research Service doesn’t even list the Tampa-Orlando line as one of the top 12 city-pairs for potential ridership. High-speed rail in Florida hasn’t left the station because its economics make no investment sense for companies or taxpayers.
Vice President Joe Biden says the Orlando-Tampa $1.25 billion is merely “seed money” and that “more funding is going to come in the future as progress is made.” Sounds to us like this project is on track to be too big to fail.
Printed in The Wall Street Journal, page A12
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