Stimulus: Mass Transit Slashed for Tax Cuts

This news has been making its way around the blogosphere, but I thought I’d throw in my two cents. Congressman Oberstar (D-MN), Chairman of the House Committee on Transportation and Infrastructure is indicating that spending for mass transit in the stimulus plan was slashed to make room for tax cuts.

But he also said his proposals to distribute billions of dollars for infrastructure through the Army Corps of Engineers, the national passenger rail network Amtrak and other programs, were sliced during negotiations within his party over spending and tax measures.

‘The reason for the reduction in overall funding … was the tax cut initiative had to be paid for in some say,’ [sic] he said.

This is a bad idea. On the purely economic implications of tax cuts instead of spending, I’ll point to this post by Paul Krugman and this one by Brad DeLong. Instead, let’s place this another context. In November, Los Angeles residents, some of the most car-friendly people in the world, voted to increase the sales tax to fund an expansion of the county’s subway and light rail lines. A similar measure passed in Santa Clara County. Californians also approved $10 billion in bonds for the construction of a high-speed rail line. Indeed, according to the Wall Street Journal, such ballot propositions passed all over the country.

Americans want more mass transit. And yet, even today, when the Los Angeles MTA board finally approved a study for the subway that would connect downtown with Santa Monica, they also discussed cutting 160,000 hours of bus service in the face of budget cuts.

We should be investing more in mass transit – local, regional, and multistate. This stimulus package is the ideal opportunity to do so, revitalizing urban life and combating climate change, while generating jobs. However, even if concerns about the ‘shovel readiness’ of mass transit projects prevents a massive investment, we should use the money to fill shortfalls in transit authority budgets, so that existing service can be expanded rather than cut.

There is a clear disconnect here between the American people, who less than three months ago were willing to pay higher taxes in order to build more mass transit and Congress. It is depressing that even Democrats apparently have their priorities wrong.

Insanity by way of Ayn Rand

I’ve read Ayn Rand – both her fiction and her serious works. I read The Fountainhead when I was 17 and visiting New York City for the first time. In that time and place it resonated with me strongly and I still find it a compelling story. What it isn’t, however, is a satisfying work of philosophy or political economy.

Setting aside the glorification of rape and terrorism in her fiction, the problem with Rand is that her philosophy isn’t very good. It is largely ignored in philosophical circles, and for good reason. There are better arguments for better variations on libertarianism out there, and one such philosopher, Robert Nozick, while sympathetic to her conclusions, has criticized Rand’s published works for not being logically sound.

All this goes to say that I am absolutely terrified when supposedly serious people offer ‘serious’ criticism based on her works.

One memorable moment in “Atlas” occurs near the very end, when the economy has been rendered comatose by all the great economic minds in Washington. Finally, and out of desperation, the politicians come to the heroic businessman John Galt (who has resisted their assault on capitalism) and beg him to help them get the economy back on track. The discussion sounds much like what would happen today:

Galt: “You want me to be Economic Dictator?”

Mr. Thompson: “Yes!”

“And you’ll obey any order I give?”


“Then start by abolishing all income taxes.”

“Oh no!” screamed Mr. Thompson, leaping to his feet. “We couldn’t do that . . . How would we pay government employees?”

“Fire your government employees.”

Oh, no!”

Abolishing the income tax. Now that really would be a genuine economic stimulus. But Mr. Obama and the Democrats in Washington want to do the opposite: to raise the income tax “for purposes of fairness” as Barack Obama puts it.

There are better arguments out there. While I don’t particularly care for Nozick’s work, it is far superior to Rand’s, and Hayek is worthy of the creedence given to him. Why, then, is Rand so frequently relied upon?

Propoganda. More on the flip.


Published in: on January 11, 2009 at 4:58 pm  Comments (1)  
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Welcome News?

Welcome news.

With the economy in recession, California’s plan to ask the federal government for billions of dollars to help build the nation’s first high-speed rail system might seem like wishful thinking rather than a feasible financial strategy.

But transportation officials say that California’s high-speed rail project seems to be on a fast track to a hefty federal contribution – perhaps as much as $15 billion to $20 billion.

This is the kind of stimulus needed in California and nation-wide: public works projects that dovetail with a clean energy economy. Unfortunately, I’d expect that the private funding portion will be the hardest amount to acquire in this economy, and with lower oil prices, it’d seem like a less likely investment even in a good economy.

Of course, in the short-run, I’d rather see a federal bailout for the State to stave off the immediate budgetary crisis than money now for a project that won’t start for several years, if such a choice must be made.

Published in: on December 26, 2008 at 10:16 pm  Leave a Comment  
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