Dan Mitchell: “There’s no reason why taxpayers across the nation should be subsidizing the cost of railway, bus, and subway travel in a handful of cities”

There Should Be No Federal Funding for Mass Transit

As a matter of sensible public policy (and well as fealty to the Constitution), the federal government should not be involved in transportation.

But since I don’t expect the current crowd in Washington has any interest in getting rid of the Department of Transportation, perhaps we should have a more modest goal of eliminating subsidies for mass transit.

After all, there’s no reason why taxpayers across the nation should be subsidizing the cost of railway, bus, and subway travel in a handful of cities.

Getting rid of these handouts would save a decent chunk of money. Here’s a chart from Downsizing Government, which shows the history of pre-pandemic spending by the Federal Transit Administration.

But that chart is now out of date since politicians have used the pandemic as an excuse to dramatically increase the burden of federal spending. Including big handouts for mass transit.

And now they want to raid taxpayers for more transit money as part of a spending spree on infrastructure.

The Wall Street Journal editorialized about this topic a couple of days ago.

Democrats are accusing Republicans of holding up the Senate infrastructure deal over funding for mass transit. Here’s what’s really going on: Republicans have bowed to most Democratic demands. But now Democrats are also insisting that they acquiesce to spending ever more to rescue broken rail and bus systems in big liberal cities. Mass transit typically receives $13 billion in federal funds each year, and Congress provided an additional $70 billion for urban transit last year in the myriad pandemic spending bills. That’s more than six times the normal transit budget and more than the annual operating and capital spending of every transit agency in the U.S. combined. …But most mass transit systems face a larger structural budget problem that pre-dated the pandemic: Ballooning operating costs from generous labor contracts and pension payments, which are siphoning off money from system improvements and repairs. Many systems have also been losing riders due to lousy service… So Democrats want Republicans to bail out those cities and their public unions. Republicans have agreed to a $48.5 billion supplemental appropriation for mass transit in the deal. But in addition Democrats are demanding that 20% of transportation spending from the highway trust fund—financed by gas tax revenues—go toward transit.

This is throwing good money after bad.

In a column for the Foundation for Economic Education back in 2019, Hans Bader explained that mass transit in an inefficient money pit.

Mass transit is largely a failure and continues to decline despite growing subsidies to many mass transit systems. Light rail systems are white elephants. …South Korea is abolishing its celebrated high-speed rail line from its capital, Seoul, to a nearby major city because it can’t cover even the marginal costs of keeping the trains running. Most people who ride trains don’t need maximum possible speed,and most of those who do will still take the plane to reach distant destinations. …most Japanese don’t take the bullet train either; they take buses because the bullet train is too expensive. Bullet trains do interfere with freight lines, so Japanese freight lines carry much less cargo than in the United States, where railroads—rather than trucks—carry most freight, thereby reducing pollution… California’s so-called bullet train is vastly behind schedule and over budget, and will likely never come close to covering its operating costs once it is built. …Just the first leg of this $77 billion project will cost billions more than budgeted. And the project is already at least 11 years behind schedule.

Government is a big reason why transit is so inefficient and expensive.

Industry expert Randal O’Toole wrote about the harmful impact of socialized systems back in 2018.

Public ownership of transit has significantly increased the cost of transit, creating another disadvantage for the transit industry relative to other modes of travel. Before 1964, transit systems in most American cities were private and profitable, albeit declining. In 1964, Congress gave cities and states incentives to take over transit systems, and within a decade nearly all had been municipalized …followed by a staggering decline in transit productivity. In the decade before 1964, transit systems carried an average of about 59,000 riders per operating employee. This plunged after 1964 and today averages fewer than 27,000 riders per employee… It is doubtful that any American industry has suffered a 54 percent decline in worker productivity over 30 years unless it was another industry taken over by the government and inflicted with all the inefficiencies associated with government control and management.

We’ll close with this chart from O’Toole’s study, which shows total taxpayer subsidies over time.

The bottom line is that government transit systems are a lot like government schools. More and more money gets spent over time with worse and worse results.

Except maybe mass transit is even worse because of absurd cost overruns.

P.S. Click here and here to learn more about the boondoggle of government-funded rail.

P.P.S. Click here to learn more about the boondoggle of government-funded subways.

TRY BORROWING AT A BANK WITH A FINANCIAL CONDITION LIKE THE USA HAS:

The problem in Washington is not lack of revenue but our lack of spending restraint. This video below makes that point. WASHINGTON IS A SPENDING ADDICT!!!

I love reading this blog by Dan Mitchell. No two people agree on everything but I sure do agree with most everything Dan writes on this blog of his. However, I disagree silently with something he has written today. I think it is encouraging that the Republicans in the House have been able to accomplish some things in slowing down the growth in spending by Obama. I know Dan would agree that more needs to be done. For instance, why don’t they just vote no on the next increase to the debt ceiling limit. I have praised over and over and over the 66 House Republicans that voted no on that before. If they did not raise the debt ceiling then we would have a balanced budget instantly.  I agree that the Tea Party has made a difference and I have personally posted 49 posts on my blog on different Tea Party heroes of mine.

What would happen if the debt ceiling was not increased? Yes President Obama would probably cancel White House tours and he would try to stop mail service or something else to get on our nerves but that is what the Republicans need to do.

I have written hundreds of letters and emails to President Obama and I must say that I have been impressed that he has had the White House staff answer so many of my letters. However, his policies have not changed, and by the way the White House after answering over 50 of my letters before November of 2012 has not answered one since.  President Obama committed to cutting nothing from the budget that I can tell. Republicans must take the next step now and vote no on the debt ceiling increase!!!

In recent months, people have asked me why I’m acting all giddy and optimistic. Am I hooked on cocaine? Have I fallen in love? Did I inherit several million dollars?

These questions started after I said the fiscal cliff was a smaller loss than I expected. Then people wondered what was going on when I wrote that we should celebrate the sequester victory. The questions got more intense when I opined that the Tea Party had made a positive difference. And people were even more nonplussed when I wrote that we should enjoy a win over the IMF.

But I’m not the only person thinking that things may be heading in the right direction.

Conn Carroll explains his optimism in the Washington Examiner. He starts by noting how bad Congress was back in 2009 and 2010.

…its liberal predecessor passed a trillion-dollar stimulus, enacted a government takeover of health care and institutionalized the power of Wall Street’s Too Big To Fail banks by passing the Dodd-Frank financial regulation law.

Then he explains that the new Tea Party Congress has changed the fiscal outlook.

…if you look at the hard numbers — if you look at the tax-and-spending trajectory that the United States was on before the 112th Congress was sworn into office, and then look at the path the U.S. is on now — you’d see that Republicans in Congress have made tremendous progress in shrinking the size and scope of the federal government.

But is there any proof?

Conn points out that the CBO “baselines” from early 2011 showed government growing very rapidly.

…the nonpartisan Congressional Budget Office released its annual Budget and Economic Outlook for fiscal years 2011 through 2021. That document showed the federal government was on track to spend…a total of almost $50 trillion ($49.8 trillion to be exact) through 2021. At the same time, tax revenues were set to rise from just 14.8 percent of GDP in 2011 to 20.8 percent in 2021.

The same estimates from early this year, by contrast, show government growing at a slower pace.

The CBO’s Budget and Economic Outlook for fiscal years 2013 through 2023 shows just how much House Republicans have actually accomplished. The federal government is now on track to spend just $46.2 trillion through 2021. That is a $3.6 trillion spending cut. And instead of taxes eating up 21 percent of the U.S. economy in 2021, now the government is set to take in just 18.9 percent.

Here are the respective baselines from those CBO publications. Let’s start by looking at how spending is projected to grow at a slower pace for the rest of the decade.

2011-2013 Spending Projections

That’s $3.5 trillion of savings. Not genuine spending cuts, of course, but it’s real progress if government doesn’t grow as fast.

Here are the revenue numbers.

2011-2013 Revenue Projections

This data basically shows that the tax burden will be much smaller than projected because about 98 percent of the Bush tax cuts were made permanent as part of the fiscal cliff deal.

And if you believe in the Starve-the-Beast theory (and you should), this will make it harder for politicians to increase the burden of government spending in the future.

Conn also notes that the unemployment rate has fallen.

Despite all of this supposedly economy-killing “austerity,” unemployment has steadily fallen, too. When Republicans took control of the House in 2011, the nation’s unemployment rate was 9 percent. Today, it has fallen to 7.7 percent.

If this seems like a familiar point, it’s because I share his assessment. I wrote back in February of last year that gridlock was a positive thing for the economy since it reduced the likelihood of new bad policies.

What’s remarkable about these developments, as Conn notes, is that folks were expecting Obama to have momentum as his second term began.

Just three months ago, many in Washington were predicting Obama would steamroll Republicans into accepting higher taxes for millions of earners, undoing the sequester and maybe even passing new stimulus spending. Instead, Republicans have stayed unified, outfoxed Obama, preserved and made permanent most of last decade’s tax cuts (including permanent indexing of the Alternative Minimum Tax) and let the sequester cuts occur on schedule. As a result, Obama’s approval ratings have tumbled, and his entire second-term agenda is in jeopardy.

The final sentence in that excerpt explains why I’m feeling semi-optimistic. Obama’s agenda of more taxes and more spending is being thwarted.

To be sure, that doesn’t mean we’re seeing good policies of tax reform and fiscal restraint. And we still face a very dour fiscal future unless entitlements are reformed.

But we’re going in the wrong direction at a slower pace, and that beats the alternative.

__________

Related posts:

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 49)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 49) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 47)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 47) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 46)

  Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 46) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 45)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 45) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 44)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 44) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 43)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 43) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 42)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 42) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 41)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 41) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 40)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 40) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 39)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 39) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 38)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 38) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 37)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 37) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 36)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 36) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 35)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 35) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 34)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 34) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 33)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 33) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 32)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 32) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 31)

Congressmen Tim Huelskamp on the debt ceiling Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 31) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 30)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 30) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 29)

 Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 29) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 28)

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 28) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 27)

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 27) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, […]

Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: