Our government investing for failure

The state of California is contemplating a bullet train between San Francisco and Los Angeles. The cost is $100 billion. The U.S. government is subsidizing a substantial portion of that.

Under the most optimistic scenario, this train will never come close to being cash-flow positive. This train will be forever subsidized by California taxpayers. Nevertheless, Democratic Gov. Jerry Brown and the Democratic Legislature insists on moving forward with the project. For the first leg of the project, California must raise (borrow) tens of billions of dollars for funding. This is in addition to a huge debt that California must raise to pay its growing government budget deficit. 

The governor of Florida was faced with a similar situation within the last year and wisely saved taxpayers tens of billions of dollars by killing the bullet train project between Tampa and Orlando. Liberals stated that when Gov. Rick Scott (R) killed the project, he would worsen the economic crisis gripping Florida, for the rail project would provide needed jobs. To the contrary, Florida's unemployment rate has declined.

In today's world, if venture capitalist and existing transportation companies will not invest in a transportation project the public sector must be should be skeptical about investing in it. You would think the public sector learned its lessons with Solyndra and the solar industry; the 30-year consistent deficits of Amtrak; the perennial-subsidies snail mail of the U.S Post Office; and other government-subsidized investments gone wild. Taxpayer money should not be used to subsidize projects rejected by professional investors.

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