Governor-elect Scott Walker should continue with his plans to refuse a “free” $810 million federal grant for a high-speed rail between Madison and Milwaukee.
High-speed rail has historically been a money-losing proposition. Indeed, only two high-speed rail lines in the world have ever broken even, both of which were overseas where geography and population centers are much more conducive to supporting high-speed rail. The Midwest’s large metropolitan areas are so few and far between that the proposed train between Madison and Milwaukee will require significant subsidies and will suck capital into a wasteful project.
It would also be prudent to put the “free money” portion of the argument in perspective. It’s ironic that the federal government is offering “free money” when it’s already trillions of dollars in debt. In other words, the high-speed rail will be financed entirely by deficit-spending, and with the ensuing interest and finance charges, could perhaps double the total cost of the project. The federal government is on an unsustainable fiscal path and current promises to American citizens will be broken. Wisconsin should keep this in mind should it choose to accept the money.
Another common fallacy surrounding the high-speed rail is that it “provides employment” for the general population. Remember that all government expenditures must eventually be paid for by taxes. Funding for the high-speed rail will come from taxing productive businesses that would have used that money to hire workers in a more efficient line of work. Why are we taxing and shrinking the productive private sector of our economy for unproductive government jobs? Now Wisconsin small businesses must compete against the government and pay higher prices for resources such as construction workers, raising their cost of doing business and stifling economic growth. In addition, estimates project the $810 million high-speed rail grant will only create 55 permanent jobs, an egregious sum of $15 million per job. This is not an efficient use of taxpayer money.
There’s also the practical matter of who would ride this train. Is a hypothetical resident from Brookfield traveling to Madison going to 1) take a car ride to the rail station and 2) pay for a ticket that would cost more than the gas of a car ride 3) for a trip that will take longer than the equivalent car ride and 4) finally arrive in Madison with no transportation but their own two feet? It’s clear that many residents living near the track will still choose automobiles for their superior flexibility and cost even if the high-speed track is built.
There are many other reasons to oppose Wisconsin’s high-speed rail, including the simple ethical problem of taxing citizens from other parts of the state to directly subsidize Madison and Milwaukee, and also how the rail would compete directly and unfairly with similar routes offered by private companies such as Badger Bus and Megabus. Moreover, our group rejects the high-speed rail on constitutional grounds and believes Washington bureaucrats shouldn’t act like giant Sugar Daddies who decide which states get money and what it must be spent on.
Young Americans for Liberty has disagreements with Scott Walker on a number of issues. However, in the case of an unnecessary train between Madison and Milwaukee, the right decision would be for Walker to kill the project and persuade Washington to return that $810 million back to the people. American citizens need that money far more than government does.
Mike Phillips ([email protected]) is a senior majoring in economics and finance and is the co-president of the UW Young Americans for Liberty.