High Speed Rail

Inasmuch as we live in a state of democratic socialism where we get to vote about our common economic endeavors, we will have the chance this fall in Proposition 1 to collectively borrow $10 billion to make a down payment on an 800-mile high speed rail system.

Man, I want to be in favor of this, but I’m not. I rode high speed rail recently in Germany. We strolled over to the train station and got a ticket out of a machine. The price was only a little less than a short flight, and the ride takes only a little longer than flying. But you go into a train station with no lines, we got the best-ever sausage at a good price, and not needing to go through security is a real blessing. I watch a lot of old movies, so if a guy speaking German wearing a uniform starts asking me questions I remember that I’m part Jewish and start to get real nervous.

But riding the HSR is a delight. Its roomier than a plane and you don’t have your ears popping.

Problem with Prop 1 is I’m having trouble believing the numbers. The proponents estimate the cost of the system at $42 billion, meaning our $10 billion is just a downpayment and the rest is supposed to come from Uncle Sam and various public/private moneylenders. The proponents see 100 million passengers as an optimistic projection, with fares ranging from $10 to $60, give or take. Skeptics point to every other public project overrun and estimate $75 – $100 billion as an actual cost. If you compromise and estimate $60 billion, and figure it has to be amortized at 5%, then each of the 100 million riders has to kick in $36 per ride to pay back the capital invested.

Since the projected fares don’t realistically support such a payback, one can only assume that the ‘once its built we will not need a subsidy’ really means that the cost of building is the subsidy and all the fare pays for is the energy and labor and maintence costs. If the project really penciled out, then it would be privately financed and voters would not be needed to pledge the downpayment.

Prove me wrong if you can, but for now I’m trusting my instinct and suppressing my happy German memories and voting no.

About Ron St. John