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Home Publications Blogs Beat the Press Really Big Number Spent on High Speed Rail

Really Big Number Spent on High Speed Rail

Thursday, 07 August 2014 15:39

The NYT had an interesting piece on the progress of high-speed rail under President Obama. As the headline tells it, we've spent $11 billion without all that much to show.

Just in case readers didn't know offhand, the federal government has spent roughly $550 billion on transportation over the last six years, so spending on high speed rail would be roughly 2.0 percent of total transportation spending. If you think this spending has been driving up your tax bill, this comes to roughly 0.05 percent of total federal spending over the last six years.While it would require a careful analysis to make a full assessment of whether the money devoted to high-speed rail has produced good results compared to alternative uses it would have been helpful to express this spending in a way that would be meaningful to most readers.

Comments (8)Add Comment
NYT piece stumbles out of the gait
written by Robert Salzberg, August 07, 2014 6:16
First line of NYT piece:

"High-speed rail was supposed to be President Obama’s signature transportation project, but despite the administration spending nearly $11 billion since 2009 to develop faster passenger trains, the projects have gone mostly nowhere and the United States still lags far behind Europe and China."

To get a sense of perspective, China has slated $96 billion for rail infrastructure this year compared to our $11 billion over 5 years for high speed rail. China's costs are estimated to be anywhere from under 1% up to 10% per kilometer of rail compared with Britain.

From NYT piece:

"Florida, Ohio and Wisconsin, all led by Republican governors, canceled high-speed rail projects and returned federal funds after deeming the projects too expensive and unnecessary."

I only know the details in Florida where Rick Scott refused $2.4 billion for building the short section between Tampa and Orlando. The $2.4 billion for the project was to come completely from stimulus money and wasn't estimated to cost Florida taxpayers a penny. (Scott whined about potential cost overruns and future maintenance.) Around 2/3 of the Florida states senators, which is controlled by Republicans, voiced their protests over Governor Scott's stupidity.

$11b is a lot of money
written by Chris G, August 07, 2014 7:38
This is a rare case where I disagree with you. $11b is a hell of a lot of money. That it's a small fraction of the transportation of the transportation budget - let alone the federal budget - is beside the point. We're not talking about 11,000,000 projects of $1k each. We're talking a modest number of big projects. We should have something to show for those projects.

Just as a back-of-the-envelope: if you figure $500k per person per year as an effective rate for labor plus materials they use doing their work then $11b works out to 22,000 person-years. (And $500k per person per year seems really high to me.) That's over a six year period so 22,000 person-years is nearly 4000 people/year. Again, not to beat a dead horse but 4000 people/year figured at a ridiculously high rate of $500k/year. If you put 4000 people per year on something - a few somethings - then you can reasonably expect to see something for their efforts.

Rationalizing large-scale failure is not okay.
The Big Dig
written by Chris G, August 07, 2014 7:43
The Big Dig was 1) way way way over budget and 2) a really damn impressive piece of engineering. The pricetag on it was $24B. (Link = http://www.boston.com/metrodes...story.html) Show of hands, who thinks the amount spent on high speed rail is worth half a Big Dig? (Or, figuring inflation, even 1/3 a Big Dig?)
I got suckered into reading the article ...
written by John Puma, August 08, 2014 2:50
... and it was much worse than even my maximally cynical expectation.

I will give only two quick points regarding the breezy, patently uninformed, (with no desire to get informed), superficial, BS attitude on exhibition ... because my life is too short dwell on the idiocy of the NYT.

Here's a quote, right at the start: " ... despite the administration spending nearly $11 billion since 2009 to develop faster passenger trains, the projects have gone mostly nowhere and the United States still lags far behind Europe and China."

Oh, really? "Nearly" $2.5 billion per year is (alleged to have been) spent and ANYONE expects any more from it than merely pipedreams of making a (very small) pimple on the ass of either the European or the Chinese systems? I doubt if this figure even approaches the annual maintenance costs of those systems. (Yes, US and America, mass transit in any form is wildly expensive. If you don't want to spend the money you'd be well served to stay home and learn how to garden ... you are going to need it.)

It's downhill from there, including no total for the federal funds "returned" by the Republican governors of Florida, Ohio and Wisconsin nor clarification if this total was, or was not, part of the $11 billion figure.

Read this article only as an example of what to avoid in reading or writing actual journalism.

There is much for which to criticize Obama, this article is the equivalent to "birtherism."
China Spends More On Rail Than Feds Spend on All Infrastructure/ Cheats on Trade
written by Robert Salzberg, August 08, 2014 5:03
China has around the same GDP as the U.S. but China plans to spend $96 billion on its rail infrastructure this year which is more than the federal government spends on all our infrastructure needs.

Things like infrastructure and education form the basis for future growth. So who thinks the U.S. economy can keep up with China?

China's trade surplus with the U.S in July. was more than half of our total trade deficit so ending currency manipulation with China would add a few points to our GDP growth.

US railways.
written by Mrrunangun, August 08, 2014 6:13
Perhaps it is worth pointing out that US railways are privately owned for the most part and their owners bear the responsibility for maintenance and investment. The Am. Railway Assn says its members spent $60 billion in the last reported year, this on an infrastructure that has been under development in the US for about 180 years. The US government supported the development of railways very generously in the 19th century. The US government is not responsible for financing the upkeep and expansion of US railways.

The wisdom of large scale public investment in so-called high speed railway development remains open to question as an economic proposition. Its support appears to rest on the promise of opportunities for public officials to reward loyal political supporters.
Hoover Dam = 4 years start to finish.
written by Odysseus, August 09, 2014 12:25
"We're talking a modest number of big projects. We should have something to show for those projects."

From the time they cut the first check for Hoover Dam to the time they cut the ribbon was about 4 years. There's no reason at all why large projects have to take a long time.
written by Eric377, August 11, 2014 11:07
I think it is an entirely valid question if the $11B been spent in ways that makes the American public anxious to spend the next $400B. I'm not sensing it. I think the Times article has it substantially correct, even if they do not calibrate the $11B in the way Baker thinks more meaningful.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.