The State Of The Union: Following Spain Down the Financial Ruin Rathole

It seems that one of the overriding priorities and fixations of this administration and some in Congress is to implement high speed rail lines throughout this country. It came up again in the state of the union speech this week and the Democrats in Congress have already allocated taxpayer funds to several high speed rail projects around the country. Included in these projects is a high speed rail line from Tampa To Orlando but more on that a little later.

Given this fixation, my atttention was drawn to an article that appeared in the January 18, 2011 issue of The Week magazine. The article summaries a piece in El Pais, a Spanish publication, that was written by Cristina Vazquez and was titled, "A Bankrupt Country With Snazzy Trains." Remember, that Spain is one of those European countries, like Greece, that is rapidly approaching a financial collapse and sovereign bankruptcy because of their heavy government debt. Information in the article included the following:

• According to Ms. Vazquez, "over the past few years, we've (Spain) spent unprecedented sums on transport improvements.
• Spain now has the most miles of highways than any other European country."
• With the recent opening of the Madrid-Valencia high speed train service, Spain ousted France as the holder of Europe's largest high speed rail network.
• However, at the expense of six billion Euros, this high speed line will carry only 3.5 million passengers a year, or less than 10,000 people a day and serve only those that need to get between these two cities. However, 400 million people commute to work on commuter rails every year in Spain or more than 1.1 million a day. Thus, the billions of Euros spent will serve less than 1% of Spain's rail users.
• While the high speed rail advocates claim that the trains are better for the environment, the cost of high speed rail is so much that most people still use their cars for the Madrid/Valencia trip since it is much less expensive, virtually nullifying the environmental argument.

The big concern is that we will end up in the same boat (or train) as Spain: wasting billions and billions of dollars on high speed rail that nobody uses but which becomes an ongoing burden to the American taxpayer. We can ill afford to waste any money now, especially on high speed rail, given the following history and current facts:

• The Congressional Budget Office announced yesterday that this year's Federal government budget deficit will be much higher than expected to the tune of over $400 billion. This will raise the total deficit this year to almost $1.5 TRILLION or about $13,000 in additional tax burden on every United States family.
• The state of California has wanted to put in high speed rail along  most of its length but after 14 years and the expenditure of almost a quarter of a billion dollars, not one piece of track has been laid. Given the failure of the political class to complete just this one rail concept, what makes us think that they can complete a national network on  time and on budget that serves the citizens of this country?
• As mentioned above, the Federal government wants to build a high speed rail line from my Tampa Bay area to Orlando. In the November 17, 2010 post to this blog I showed how ludicrous that concept is from practical perspective. If you do not believe my calculations in that post, consider some observations by St. Pete Times writer, Tampa Bay resident Howard Troxler, who wrote on December 12, 2010: "Hey, let's take the kids to Disney (in Orlando). We'll drive from our house to downtown Tampa, find a park and ride lot, pay $30 apiece for us and the kids for train tickets, wait for the train, and get there about when we would have gotten there anyway for the cost of gas money. Then, after an exhausting day, we'll negotiate our way from Disney back to the train station, wait for the train, get off back at the Tampa station, THEN get in our car and drive home!"
• I read somewhere that every time an Amtrak customer goes first class on an Amtrak train, it costs the American taxpayer several hundred dollars to subsidize that traveler. Imagine how much money we will waste if the Amtrak concept is rolled out nationwide.

Does our infrastructure need to be repaired? Definitely. Remember what happened in Boston and Minnesota a few years ago. A traveler was killed in the Big Dig Boston tunnel when a concrete slab came loose and crushed her as she drove by. In Minnesota, a highway bridge actually collapsed from neglect. But we need to take any funds that Obama and some Democrats want for this high speed rail folly and use it to make sure Americans do not die from the simple act of traveling.

Do we need high speed rail lines? Not today. Not when:

• Our budget deficit is crippling today and the payoff, if any, for high speed rail is likely decades down the road (see California example above). By then, the country could be financially bankrupt and the ordinary, day-to-day infrastructure, the infrastructure that most Americans use, could have really crumbled away. It's a question of priorities and financial survival.
• The political class has shown no ability to profitably manage any kind of rail line, whether it is building a new one (e.g. California) or operating an existing one (e.g. Amtrak).
• Lines like the Tampa to Orlando high speed rail line will not reach any kind of desirable utilization. Americans love their cars and Americans love to drive and Americans like to do things quickly. Who in the world thinks that people in Tampa and Orlando will use this line, or any high speed line like it, that costs more, takes more times, and eliminates the freedom of the road that Americans love?

It is this last concept that is so distressing when it comes to our politicians. It is just another example, and unfortunately, it could become a very expensive and wasteful example, of politicians being totally out of touch with the rest of the country and understanding root causes of situations. And it is the same symptom that will take this country down the financial ruin rathole. The parallels to Spain, who will hit that rathole first are so strong. Spending money for the sake of ego and for the sake of spending money. Ms. Vazquez concludes her article with the observation: "The big difference between Spain and other European countries is that the others plan services, while we just plan spending."

Given our $1.5 TRILLION deficit for this year, it looks like our politicians and Spain's have the same trait or gene: planning on spending, not on fulfilling needs of Americans. Let us hope that we do not suffer the same likely financial fate of Spain as a result.

How do we fix the everyday infrastructure in the face of this crippling deficit? Consider a few approaches:

• First, delay any expenditures on high speed rail lines, regardless of what politician's ego gets deflated including the President's, and divert that money to real infrastructure repair programs so that fatal Minnesota bridges and Boston concrete panels do not happen anymore.
• Second, do not let Joe Biden or any politician determine what infrastructure needs get funding since the Associated Press proved in late 2009, that despite Biden's oversight responsibility for economic stimulus spending, money was diverted to politicians' home states and districts where about half of the bridge infrastructure money was spent to repair bridges that did not need repairing. Appoint a commission of infrastructure experts to make the call, independent of Congress, the White House, and the lobbyists.
• Third, any additional funding that Obama needs for day-to-day, current infrastructure repair, comes under a "4 To 1" arrangement. For every dollar he cuts out of the Federal budget to help restore financial sanity to our government's wasteful spending, he gets to keep one dollar for infrastructure improvement, up to a pre-set amount. That way we protect Americans while they travel today while cutting the budget, and delaying the probably high expense, low return from high speed rail that our political class will stick us with.

Its called setting priorities, something our politicians stink at besides their inability to understand the root causes of a situation. They need to 1) do much fewer projects in their jobs, 2) focus much more on a much smaller set of efforts that affect most American families and 3) do it with a much smaller budget. High speed rail, as Spain found out, fits none of these requirements.





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