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Thursday, March 22, 2012

Solyndra Times Seven, Why California’s high-speed rail project is an even greater waste of federal tax dollars.

Subsidized high speed rail projects are notorious for vastly underestimating the cost, not being economically feasible and adding to the big pile of federal and state debt. The California bullet train boondoggle is now estimated to cost at least $98 billion, with the Federal government initially kicking in $3.5 billion. At the end of the day it's always the taxpayers who are forced to pick up the tab.
California has about $13 billion on hand to begin the first phase of the project. The rail authority and its boosters claim that the federal government and private investors will supply the remaining $85 billion...Wall Street isn’t enamored with the project, and private investment funds have shown zero interest in partnering with California unless they receive revenue or ridership guarantees. But guaranteeing a certain return on investment would amount to promising subsidies if the rail authority’s immense ridership forecasts don’t pan out—taxpayers would be making up the difference. And Proposition 1A—the 2008 state ballot measure providing $9.95 billion in bond money for the project—explicitly bans taxpayer-funded operating subsidies.
Read the rest here
City Journal 

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