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California High Speed Rail - Keynes

 
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PostPosted: Sun Sep 28, 2014 5:17 am    Post subject: California High Speed Rail - Keynes Reply with quote

PeakTrader:

Estimates for California high speed rail project:

* $68 billion to build.
* $1.7 billion annual operating and maintenance costs (electricity representing 30% of costs).
* $1.1 billion annual revenue (high estimate).

It may not be worth it.

Lt. Gov. Newsom: Stop California bullet train, redirect money
02/15/2014

“Lt. Gov. Gavin Newsom, once a strong supporter of California’s high-speed rail project…”I would take the dollars and redirect it to other, more pressing infrastructure needs, and I am not the only Democrat that feels this way.”

Newsom said he was the first California mayor (San Francisco) to support the (first) bond measure and even campaigned for it with then-Gov. Arnold Schwarzenegger.

Now, he said, “I think I’m where the public was and is. We don’t have the federal dollars that we were hoping for — only about $3 billion has come forward. The private sector hasn’t stepped up,” he said.”

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"If the trains reach their full ridership potential and require the maximum 3 billion kWh of electricity, the bill adds up to about $531 million a year. The Rail Authority estimates that electricity will represent nearly 30% of its annual operation and maintenance cost."

http://www.fresnobee.com/2011/09/25/2553219/high-speed-rail-would-test-power.html

"The money generated by ticket sales for those riders is projected to be between $417 million and $773 million in today's dollars -- or $577 million to $1.07 billion in dollars adjusted for inflation through 2025."

http://www.fresnobee.com/2014/02/07/3756311_stable-costs-predicted-in-new.html?rh=1

http://www.mercurynews.com/california-high-speed-rail/ci_25151931/lt-gov-newsom-stop-california-bullet-train-redirect

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Chris Herbert:

Is it OK to quote Keynes here?

‘It is curious how common sense, wriggling for an escape from absurd conclusions, has been apt to reach a preference for wholly ‘wasteful’ forms of loan expenditure rather than for ‘partly’ wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict ‘business’ principles. For example, unemployment relief financed by loans is more readily accepted than the financing of improvements at a charge below the current rate of interest; whilst the form of digging holes in the ground known as ‘gold-mining,’ which not only adds nothing whatever to the real wealth of the world but involves the disutility of labor, is the most acceptable of all solutions.’

So no trains because they don’t ‘pay.’ Certainly, let’s keep those people on Unemployment Insurance, however.

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PeakTrader:

I agree, people should work and add value to society in exchange for government benefits.

Unfortunately, too much government benefits are “free.”

However, does it make sense to force everyone to pay $2 for a public good that’s worth $1 – year after year – generation after generation?

Of course, the public good may be worth more than $2 to a small group of people – and less than $1 for the masses.

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