It is amazing to me that more is not being made of Barack Obama's call for a "high-speed rail" that connects 80% of the country. Not because I have any objections to a high-speed rail.if it's market-warranted. But because if it was market-warranted and profitable, it would have already been built.
The fact of the matter is that the reason we don't have a high-speed rail right now is because people have a multitude of other options that are cheaper and more reasonable than the vast cost any company would incur in building a rail. But in classic Obama fashion, he proposes that vast cost be assumed by...you, the taxpayer.
And what will be the logical consequence? It's not as if we don't know:
High-speed rail is a budget buster. Japan, with the world's leading system, illustrates the financial devastation that high-speed rail can produce. For 25 years, Japan borrowed to build a system serving the ideal rail corridor, nestled along a single coast with a population of more than 75 million people. Ridership was artificially increased by high gasoline prices and one of the highest highway tolls in the world. Yet this modest system, only twice as long as proposed California system, played a major role in driving up a gargantuan rail debt that was transferred to Japanese taxpayers. The rail debt added more than 10 percent to the national debt. This is akin to adding $1.4 trillion to the U.S. national debt.
Virtually everywhere high-speed rail has been constructed, financial liability has fallen to the taxpayers. In Taiwan and the United Kingdom, taxpayers assumed billions of dollars in private debts for much more modest high-speed-rail systems than Japan's.
That's what is coming if the Republicans in Congress don't honor their commitment to limiting spending, particularly on these unnecessary and wasteful projects.
I'm not opposed to a high-speed rail. I might even ride one. But it needs to come as the result of market innovation, not government subsidization.