-- Posted Tuesday, 17 July 2012 | | Disqus

The opportunity to build a high-speed rail line that would initially traverse a stretch of California desert and farmland is catnip to the state’s politicians and organized labor, if not to taxpayers. The $68 billion project would mean instant cash and jobs for a state that is verging on financial collapse. But does it make economic sense? Maybe to someone on LSD. As far as we’re concerned, the money would be better spent drilling oil wells in YMCA basements. The interest alone on $68 billion would probably suffice to provide limo service for any Californian needing to get from point A to point B. And if one assumes that the eventual cost of this boondoggle will vastly exceed initial estimates, you could probably hire a part-time chauffeur for every working Californian on the interest the sum would generate.

Even now, it seems obvious that huge cost overruns are being cynically baked in-the-pie. The $10B initial round of financing would go toward the easiest part of the project: building tracks and infrastructure for a 220mph train that would connect Merced and Bakersfield. This would be a piece of cake politically and technologically, since there is little to impede the laying of tracks between those cities. The political sales pitch promises quite a bit more, though, envisioning as it does connections between Los Angeles, San Francisco, Sacramento and some other sizable cities. Linking them supposedly would make the overall project economically viable, but as of yet there is not even a promise of funding for the crucial latter stages of the project. Under the circumstances, it’s easy to imagine, ten years from now, a nasty and intractable squabble over the wisdom of throwing so much more good money after bad.

And in Colorado…

Here in Colorado, we have first-hand experience of Big Government’s increasingly desperate need to throw as much money as it can at unnecessary transportation projects. That, after all, is where unfathomably large quantities of money can be most easily absorbed into the economy. Washington has been trying to impose on certain Colorado neighborhoods a beltway link that would bring Denver sprawl into our back yards. Never mind that an already-built stretch of the beltway is outlandishly expensive for users, costing $13 to drive just 22 miles from your editor’s home to the airport. That’s why the road is all but deserted most of the time. Nevertheless, in their zeal to finish the loop, Colorado politicians attempted to pass a law that would have trashed home rule, allowing the state to condemn any structure or dwelling in their way. Local opposition has been fierce, to put it mildly, and it remains to be seen whether the Highway Lobby, with unlimited funds and the backing of Obama’s edicts and bureaucratic goon squad, will prevail. An ace-in-the-hole for the locals is that the beltway would need to pass through Rocky Flats, site of a defunct nuclear facility and toxic waste dump. Locals would prefer that the dust not be stirred up, but there are other environmental concerns as well that might easily have waylaid the project if the country were not mired in a Great Recession. In the meantime, don’t be surprised if The Government shows up in your town promising a trainload of highway dollars plucked from the Washington money tree. With any luck, you’ll be able to find much better uses for tens of billions of dollars than connecting Mudville to Hayseed via a 220 mph train.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indication of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2012, Rick Ackerman. All Rights Reserved.www.rickackerman.com

-- Posted Tuesday, 17 July 2012 | Digg This Article | Source: GoldSeek.com

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