Perhaps “bizarre” is not the appropriate word, as Matthew Yglesias is employed by the Obama administration’s barely unofficial think tank/PR shop Center for American Progress, which supports wasteful spending on high-speed rail — surprise! — just like the Obama administration. “Nonsensical” is probably a better adjective. Anyway, government-subsidy shill Yglesias took issue with Cato’s Tad DeHaven’s Cato @ Liberty post on Robert Samuelson’s excellent debunking of high-speed rail, but couldn’t really refute any of it. Instead, he claims $1 trillion isn’t that big of a deal:
Currently, the government needs to pay 4.1% interest on a thirty year bond. And according to the handy dandy amortization-calc.com to amortize a 30 year loan of $1 trillion at an interest rate of 4.1% per year would cost $57.99 billion a year for thirty years. Note that’s in fixed, nominal terms, so while it’s a fair amount of money in the short term by the 2030s it’ll be a joke relative to our Nominal GDP. Contrast that to the $708 billion FY 2011 budget request the Obama administration submitted. It seems to me that an 8.1 percent reduction in defense expenditures in order to create a transformative nationwide new infrastructure program would be a no-brainer.
Yglesias doesn’t consider whether or not high-speed rail makes sense from a cost/benefit perspective. It doesn’t. Nor does he address the inconvenient truth that many of the so-called “high-speed” rail corridors aren’t high-speed by developed-world standards. In fact, he doesn’t even make a case for high-speed rail; rather, he compares subsidies for his preferred project to defense spending. And that’s about it.
Cato’s Randal O’Toole posted a thoughtful response here. It continues to amaze me that progressives, supposed champions of more egalitarian outcomes through heroic central planning, would support a government program that would primarily benefit wealthy urban elites. But when you consider the fact that most of them, including Dalton-Harvard alum Matthew Yglesias, are wealthy urban elites, things begin to make a little more sense.