Commuter Rail to New Hampshire?

[HenryAlan]

Frank -- that model is broken -- we are Mega Greece -- but there is no Mega Germany to bail us out -- In fact there is no Federal Money anymore

This is demonstrably untrue. The Greece problem regards fundamentals, the high debt load is a symptom of greater problems. We have very different issues in the United States, and very little of our economic status even remotely resembles Greece. If we had no central bank, no sovereign currency, an economy radically out of line with exchange rates, endemic corruption at every level of government and throughout industry, no natural resources, and a shrinking population, we'd still be far better off than Greece. Greece has all of these problems and others. We don't. Stop making this statement, it's utterly false.

Now, if we don't have money for transit studies, it's not because we are bankrupt. It's because we've picked other priorities. We had eight years of radically bad spending choices. That doesn't mean we no linger have any available choices.

 

[Lurker]

Now, if we don't have money for transit studies, it's not because we are bankrupt. It's because we've picked other priorities. We had eight eleven oh Hell 50 years of radically bad infrastructure spending choices. That doesn't mean we no linger have any available choices.

Fixed it for you.

Roads to nowhere are killing the country in maintenance costs and the other hidden costs of sprawl. Every capital project, both repair of existing and new, needs to have the maintenance costs analyzed. Ditching new highways in favor of improving rail freight would save the country more money than any other transportation projects first. Then move onto eliminating lots of frivolous secondary highways and focus on federal funding only going to roads on key corridors, critical resource, manufacturing, research, and population centers.

 

[HenryAlan]

I have no objection to your edits. Agree with your follow-up, too.

 

[whighlander]

This is demonstrably untrue. The Greece problem regards fundamentals, the high debt load is a symptom of greater problems. We have very different issues in the United States, and very little of our economic status even remotely resembles Greece. If we had no central bank, no sovereign currency, an economy radically out of line with exchange rates, endemic corruption at every level of government and throughout industry, no natural resources, and a shrinking population, we'd still be far better off than Greece. Greece has all of these problems and others. We don't. Stop making this statement, it's utterly false.

Now, if we don't have money for transit studies, it's not because we are bankrupt. It's because we've picked other priorities. We had eight years of radically bad spending choices. That doesn't mean we no linger have any available choices.

Henry -- OK there was some hyperbole to make the point

Specifically -- As to your contention that we are not bankrupt -- perhaps not in a technical sense -- yet anytime that you are over 100% of GDP in your debt -- you are on thin ice -- hence the reason that our AAA credit rating is gone.

We are far beyond the historical averages for total spending as a % of GDP -- the only other time where this % of GDP was going to the Federal Government was during and immediately after WWII. However, as this time the spending is dominated by transfer payments and non-critical domestic spending -- we are now operating in uncharted territory and on a spending track which is unsustainable.

The total Federal Obligation are at least 3X GDP including guarantees and unfunded pensions, etc. Ultimately, not matter what form of economy you prefer to have -- there is a limit as to how much you can spend as a percentage of the total domestic product -- and we are very very close to that limit.

How this situation is resolved depends on who's in charge in DC. But whether through action by the FED and Treasury to monetize the debt resulting in inflation; assets seizure (IRA's) or some incredible tax rates -- unless there are real cuts in spending (not just the rate of growth or even the baseline assumptions) the stuff will hit the fan -- and there really is no Mega Germany to bail-the-US-out from this financial quagmire,

My point was simply that which ever party wins the election for president -- there will be austerity in the discretionary spending part of the budget -- so don't expect much for studies and operating subsidies until at least the economy starts growing and it can grow a good bit to allow the operating deficit to get back to mid 2000 - 2006 range in absolute current dollar terms.

Note -- that because of things such as the Gasoline Tax and Aviation Trust Funds (and the fact that its really hard to pry the porkers from the trough) there are likely to still be some Federal funds for expansion and certainly for repair of critical infrastructure. i also don't expect that promised funds already obligated will be withdrawn unless there are bridges to nowhere still floating about.

 

[whighlander]

Fixed it for you.

Roads to nowhere are killing the country in maintenance costs and the other hidden costs of sprawl. Every capital project, both repair of existing and new, needs to have the maintenance costs analyzed. Ditching new highways in favor of improving rail freight would save the country more money than any other transportation projects first. Then move onto eliminating lots of frivolous secondary highways and focus on federal funding only going to roads on key corridors, critical resource, manufacturing, research, and population centers.

Lurk -- I can live with that as long as the same criteria is applied to the frivolous long-haul passenger trains run by Amtrak just because various Congress persons are involved.

I would suggest the following process:
1) a complete study of all the critical economic corridors to identify the critical highways, railways, airports, seaports and all the accessory bridges, tunnels, interchanges, feeder roads
2) Rank them by some measure of utility to the economy,
3) identify the deficiencies at the transportation system level -- priority on fixing what is broken then expanding based on economic return
4) prioritize everything
5) Find-out how much money their is available in infrastructure funds for the next 5 years -- independent of the above needs analysis
6) taking the available funds from (5) and the prioritized requirements from (4) -- Write a capital budget with the funding from the Trust Funds and if it can be justified from borrowing
7) Authorize the projects based on the priories and the promise of the work being completed within the 5 year window
8) Then repeat the process ad infinitum

So for example the following would be some local priorities for new construction -- not already underway or obligated (e.g. Assembly Sq., Green Line to Medford):

complete Rt-44 to Interstate standards from I-95 to Rt-3 in Plymouth
highway and rail access to former South Weymouth Naval Air Station
highway access to Worcester Airport
Silver Line tunnel under D Street
some sort of Red-Blue connector or the DTX State to DTX platform connector
I-95 / I-93 Woburn interchange
Fix Haverhill Line track and bridge
Rt-2 to Interstate standards from I-190 to I-495
High Speed electrified right of way Boston to Worcester

 

[Matthew]

Henry -- OK there was some hyperbole to make the point

Specifically -- As to your contention that we are not bankrupt -- perhaps not in a technical sense -- yet anytime that you are over 100% of GDP in your debt -- you are on thin ice -- hence the reason that our AAA credit rating is gone.

We are far beyond the historical averages for total spending as a % of GDP -- the only other time where this % of GDP was going to the Federal Government was during and immediately after WWII. However, as this time the spending is dominated by transfer payments and non-critical domestic spending -- we are now operating in uncharted territory and on a spending track which is unsustainable.

You honestly have no idea what you are talking about. We are pulling out of a depression that is worse than any since WWII. Spending as a % of GDP is high because GDP is much lower than it should be. This is a natural state of affairs for a recovering economy. The lack of "AAA rating" is meaningless. That was a political stunt. In fact, treasury bill interest rates are as low as they can possibly be. That means the market is showing no signs of worrying about US government debt.

So your alarmism is entirely unwarranted, and I hope nobody else will be fooled by it. And yes, we can fund a transit study if need be.

 

[HenryAlan]

Current tax receipts are 16.3% of GDP, down from the historic average of 18.5%. The CBO estimates the cost of the Bush tax cuts at 2%. Is it really so hard to figure out that the deficit "crisis" is artificial and temporary? Austerity alarmism is a political argument designed to eliminate programs not favored by the elites. We can and should fund transit studies and construction.

 

[whighlander]

You honestly have no idea what you are talking about. We are pulling out of a depression that is worse than any since WWII. Spending as a % of GDP is high because GDP is much lower than it should be. This is a natural state of affairs for a recovering economy. The lack of "AAA rating" is meaningless. That was a political stunt. In fact, treasury bill interest rates are as low as they can possibly be. That means the market is showing no signs of worrying about US government debt.

So your alarmism is entirely unwarranted, and I hope nobody else will be fooled by it. And yes, we can fund a transit study if need be.

Mathew -- it sounds like either you are drinking the administration's Koolaide or you are preparing it:

let's start in reverse order:

Treasury Bill rates are low because the Fed is buying -- they call this Quantitative Easing -- another description is robbing Peter to pay Paul -- or just "priming the pump." In turn the Fed discount rate is near 0% -- this means the big banks can borrow at very low cost from the Fed to do what -- buy Treasuries of course. The banks now make much of their money by collecting the interest on Treasury debt -- of which there is an unending supply because of rampant spending.

The above is not how a normal economy functions.

However, this is the mechanism that the Too-Big-to_fail Banks used to repay their bailout loans -- they bought Treasury debt of varying maturities and then repaid the Treasury for the Bailout with its own interest payments.

Ordinarily the banks would buy money from depositors (paying interest at some nominal rate) and then sell the money by making loans to businesses at rates above the cost of the money and above the rates offered by the Treasury albeit at some increased risk. That is how a normal credit market functions.

However, all of this cycling of $ through the big banks the Fed and Treasury didn't leave much for the banks to do what they had traditionally done -- lend money to business -- a risky business -- so hey didn't. It was and still is quite difficult for small businesses to get adequate credit although things are improving on that front.

While the loss of the AAA bond rating is somewhat artificial it does signify that normal investors are not as totally comfortable with the "Full faith and Credit of the US" as they once were. The price of gold leaping off the charts is another indication of the unconformableness of investors with Treasury as is the price of oil. In effect the OPEC-ers are trading oil for gold rather than holding dollars as they traditionally had been doing.

At this point in a normal recovery from a major recession such as in the early 1980's, the economy would typically be growing quite fast compared to historic rates, as excess capacity would be available for expansion. Instead, we have seen anemic growth rates similar to those exhibited by the EU along with persistent high unemployment rates.

Yes, during a recovery from a recession for a while spending will be higher than average as % of GDP because of lagging effects such as continuing extended unemployment payments and tax collections trailing the growth in the economy. However, according to the official definition of a recession this one has been over for long enough to have passed out of that phase -- except of course we haven't.

In addition to the cyclical changes in spending as a % of GDP, the current administration and the previous Democrat Congress accelerated domestic spending dramatically, Meanwhile total revenues have grown slowly -- the result is the explosion of debt that has been incurred in 3 years in excess of the debt incurred in the previous 8 years, including the milder recession at the collapse of the DotCom / TeleCom Bubble

There are no numbers included above intentionally as there is always a battle over the fine details depending on whose numbers -- But not this time -- the deviation from the norm is more than a matter of degree. The simple fact that the Senate refuses to pass any budget bill is indicative of a fundamental disregard for the stewardship of the economy exhibited by the current administration and its henchmen in the Senate leadership.

 

[whighlander]

Current tax receipts are 16.3% of GDP, down from the historic average of 18.5%. The CBO estimates the cost of the Bush tax cuts at 2%. Is it really so hard to figure out that the deficit "crisis" is artificial and temporary? Austerity alarmism is a political argument designed to eliminate programs not favored by the elites. We can and should fund transit studies and construction.

Henry -- and what are the numbers for Spending as % of GDP

Post WW II historic average == ?

GW Bush administration average FY 2001 through FY 2006 == ?

GW Bush administration and Democrat Congress average FY 2007 through FY 2008 == ?

Obama administration and Democrat Congress average FY 2009 through FY 2010 == ?

Obama administration and split Congress average FY 2011 through FY 2012 == ?

I think you will find that while revenue has been somewhat depressed due to the slow recovery, spending is accelerating

The above is indicative of a general problem with excessive spending which can be viewed as a character defect due to the DC-centric lifestyle which most of our elected representatives now enjoy. Our permanent governing class is totally divorced from the lives and challenges of their nominal constituencies.

Note that even the European social democrats have realized that spending needs to be be brought under control and that more has to be done to grow their economies -- meanwhile the Obama administration is Hell-bent on trying to do in 4 years what it took a couple of generations for the British Labor Party to achieve. As Maggie Thatcher once remarked -- the only thing wrong with socialism is that eventually you run out of other peoples' money

 

[HenryAlan]

I have no desire to make this a debate on economics. But if you are so certain about the virtues of austerity during a deep recession, take a look at tax receipts in Europe post spending cuts -- they have declined across the board. The Europeans killed their recovery by trying to close deficits, and the revenue loss has actually widened the gap. Big mistake.

Now, let's get back to trains in New Hampshire, shall we? The money for the study is already allocated. It will be spent either on a study for New Hampshire, or on the next useful item on the list. There is no virtue in making a principled stand in this instance.

 

[Matthew]

The above is not how a normal economy functions.

This is about all you got right. The economy is not in a 'normal' state right now, with the real rate of interest dipping below zero and people still happily buying up T-bills.

Your mention of gold, a commodity, as some kind of important economic indicator means that you are stuck in a weird warp of economic misinformation. You conveniently ignore the irresponsible spending of the Republicans from 2002 to 2006 when they passed massive unfunded tax cuts, the biggest unfunded entitlement expansion in history, and started two unfunded wars; instead you focus on desperate measures to save the economy in the past few years. Talk about wearing ideological blinders.

I find it amusing that you want to imitate Europe now. The 'austerity' policies that the Europeans are following are leading them straight into a double dip recession if they keep up. No thanks, our response is far from perfect, but at least we are not making that mistake.

There are plenty of actual sane reasons to not support commuter rail extensions. Here, I'll give you one: The MBTA should focus on its core mission of providing reliable and frequent transportation within about an hour's ride of the city (exceptions made for big destinations).

 

[whighlander]

This is about all you got right. The economy is not in a 'normal' state right now, with the real rate of interest dipping below zero and people still happily buying up T-bills.

Your mention of gold, a commodity, as some kind of important economic indicator means that you are stuck in a weird warp of economic misinformation. You conveniently ignore the irresponsible spending of the Republicans from 2002 to 2006 when they passed massive unfunded tax cuts, the biggest unfunded entitlement expansion in history, and started two unfunded wars; instead you focus on desperate measures to save the economy in the past few years. Talk about wearing ideological blinders.

I find it amusing that you want to imitate Europe now. The 'austerity' policies that the Europeans are following are leading them straight into a double dip recession if they keep up. No thanks, our response is far from perfect, but at least we are not making that mistake.

There are plenty of actual sane reasons to not support commuter rail extensions. Here, I'll give you one: The MBTA should focus on its core mission of providing reliable and frequent transportation within about an hour's ride of the city (exceptions made for big destinations).

Mathew -- I suggest you do some LIGHT reading about the 1970's and the 1980's in the US, and the decade of stasis in Japan {with its negative interest rates} -- and for general background I suggest Ludwig Heinrich Edler von Mises, or perhaps Friedrich August von Hayek -- both of whose works are available for free download.

yo wrote: " Your mention of gold, a commodity, as some kind of important economic indicator means that you are stuck in a weird warp of economic misinformation. "

Whether they are totally rational or simply emotionally driven -- people, institutions and even some governments buy gold when they have doubts about the future value of the currency that they are holding.

See for example the following article from CNBC on why the University of Texas has bought quite a bit of physical gold bullion:

http://www.cnbc.com/id/42682491/Why_the_University_of_Texas_Invests_in_Gold

Why the University of Texas Invests in Gold
Published: Wednesday, 20 Apr 2011 | 3:01 PM ET
By: Gennine Kelly
Web Producer, CNBC

In an undisclosed location underground in New York City sit 6,643 gold bars, worth $987 million, recently acquired by the University of Texas Investment Management Corporation, one of the largest college endowments.

"We began buying gold in September of '09 at about $950 dollars an ounce, our average price is about $1,150, we've invested around $750 million dollars in gold over that twelve months and now it has a market value of around a billion dollars," Bruce Zimmerman, chief investment officer for UTIMCO, told CNBC Wednesday.

Gold represents 5 percent of UTIMCO's portfolio. "The role gold plays in our portfolio is as a hedge against currencies. The concern is that we have access monetary and fiscal stimulus," Zimmerman said.

The endowment is worth an estimated at $20 billion.

Today -- there are a lot of people who wonder what the value of a dollar or a euro will be in real-terms in a decade. We know that enormous growth has been underway in the money supply for quite a while as the debt is being monetized and converted into cheap dollars. So far, due to the overwhelming amount of excess of things such as houses, land, office furniture, nearly new computers, etc -- the inflation has only showed up in bits and pieces such as orange juice, gasoline, beer, imported wine. However, as the economy slowly begins to improve -- the excesses will be consumed and a whole lot more dollars will be chasing only a slight increase in the supply of goods. Thus if you are collecting a lot of $ for your oil being pumped out of the sand in the middle east -- would you rather hold it all in $ or prudently have some of it in that shiny yellow stuff?

By the way -- as opposed to the endowments of HU or MIT the Permanent University Fund of UT is like the Arab sovereign assets funds founded on oil

Did I like the fact that W Bush didn't veto wasteful spending during the period when he had a Republican Congress -- NO!

However, compared to the profligate "Spend Now and Pay Never" of the Reid/Pelosi Era [FY2007 through FY2010] especially the Obama period from FY 2009 to FY 2010 -- the FY 2001 - 2006 Bush period was a model of restraint and fiscal discipline.

Ultimately, as was indicated by the results of the 2010 elections at all levels and nearly coast-to-coast -- the American Taxpayers are fed-up with business as usual in DC -- whoever is the President in 2013 -- the age of the big spender as Bill Clinton said is really over

 

[underground]

I suggest Ludwig Heinrich Edler von Mises, or perhaps Friedrich August von Hayek

Ha ha! Is there any topic where you wouldn't suggest reading right-wing libertarians?

 

[whighlander]

Ha ha! Is there any topic where you wouldn't suggest reading right-wing libertarians?

Underg -- absolutely:
1) Art history of the Middle Ages
2) Particle physics of the standard model
3) Etiology of the Gray Squirrel
4) Energetics of meta-stable helium as rocket fuel

and probably a few others :=}

PS: they { Ludwig Heinrich Edler von Mises, or perhaps Friedrich August von Hayek } liked to call themselves "Classical Liberals"

 

[FrankLloydMike]

whighlander -- it sounds like either you are drinking Ron Paul's Koolaide or you are preparing it

HenryAlan said:

Now, let's get back to trains in New Hampshire, shall we? The money for the study is already allocated. It will be spent either on a study for New Hampshire, or on the next useful item on the list. There is no virtue in making a principled stand in this instance.

Exactly right. I think the principled stand mentioned is exactly the wrong thing stand to take, but you're right that whether you agree or not, in this case it's meaningless. This is just another case of amateur politicians in New Hampshire passing up resources in the name of principle (that a huge majority of residents disagrees with) and ensuring that the state continues to send its money elsewhere.

 

[underground]

Attn Everyone, the following is a list of topics in addition to architecture that you can safely discuss with whighlander:

1) Art history of the Middle Ages
2) Particle physics of the standard model
3) Etiology of the Gray Squirrel
4) Energetics of meta-stable helium as rocket fuel

 

[Matthew]

However, compared to the profligate "Spend Now and Pay Never" of the Reid/Pelosi Era [FY2007 through FY2010] especially the Obama period from FY 2009 to FY 2010 -- the FY 2001 - 2006 Bush period was a model of restraint and fiscal discipline.

Funny, by coincidence, someone produced this chart yesterday:

Now that the facts are staring you in the face, will you admit that you have no clue what you are talking about when it comes to government spending and the economy?

I'm going to guess not, but personally, I would prefer to discuss interesting architecture, transit and history, and not spend my time pointing out all your mistakes.

Perhaps you have something interesting to say about my proposal for MBTA Commuter Rail to focus on serving communities within an hour's ride or so?

 

[FrankLloydMike]

There are plenty of actual sane reasons to not support commuter rail extensions. Here, I'll give you one: The MBTA should focus on its core mission of providing reliable and frequent transportation within about an hour's ride of the city (exceptions made for big destinations).

I completely agree, and Manchester, like Providence, is right at the edge of that one-hour ride.

I believe the idea (which will be fleshed out if someone is able to accept the study in place of the state), would be to run trains express from the New Hampshire stations to North Station, with Massachusetts stops in Lowell and Woburn only. I could be wrong, but I think it would essentially be a semi-separate service, running along the same line as the Lowell line. I read somewhere that the idea would be to get from Concord to Boston in a little over an hour, maybe 90 minutes--I can't recall. So that would put Manchester (and certainly Nashua) in the just about an hour range, and I think those two cities are big enough to justify service even if it's slightly more than an hour. Of course, that would all depend on New Hampshire getting its act together (like it had from 2006-2010 at least) and funding the service.

I have no idea of the ridership figures, but Worcester looks to be about two hours from Boston. It seems like a big enough city to justify the lengthy connection, but I'm curious to know what you think. Fitchburg, which is much smaller, is about 90 minutes out. I'm curious to know what you think about service to places like that? I honestly have no idea how valuable the service is to people in those communities, but I imagine losing it would be a big deal.

In the end, I think a commuter rail extension to New Hampshire--at least the Capitol Corridor--might function as more of a separate entity than the Providence line, but I really don't know. Either way, I think it's valuable and necessary for the Manchester-Nashua area, and the state needs to do what it takes to get it in place and functioning properly, starting with the upcoming election.

 

[whighlander]

Attn Everyone, the following is a list of topics in addition to architecture that you can safely discuss with whighlander:

Underg:

besides the somewhat tongue in cheek list (reproduced below for this discussion)

1) A -- rt history of the Middle Ages
2) Particle physics of the standard model
3) Etiology of the Gray Squirrel
4) Energetics of meta-stable helium as rocket fuel

I think its usually safe to discuss the mechanical nature and behavior of critical infrastructure and even some of the more process and methodology-oriented matters related to planning of developments

and as I said -- and probably a few others :=}

 

[whighlander]

Funny, by coincidence, someone produced this chart yesterday:

Now that the facts are staring you in the face, will you admit that you have no clue what you are talking about when it comes to government spending and the economy?

I'm going to guess not, but personally, I would prefer to discuss interesting architecture, transit and history, and not spend my time pointing out all your mistakes.

Perhaps you have something interesting to say about my proposal for MBTA Commuter Rail to focus on serving communities within an hour's ride or so?

Mathew -- As I said in one of the earlier posts -- I didn't want to make it dueling statistics -- there are so many ways to present those kinds of curves and there are so many sources available with their own perspectives, etc. -- I can just as easily present for your ignorance and disregard similar plots (perhaps with different axes and "adjustments", baslines etc.).

By the way -- I've been plotting things economic for several decades ever since I started to follow economics as a hobby after having studied it to meet the Humanities concentration requirement at MIT back in the 1970's.

In that vein -- from a slightly humorous perspective there was a pair of legendary graffiti carved into the back of one of the old wooden chairs in 10-250 (long since retired from service) the priority of the graffito are known only to the perpetrators:

1) Science is a Communist Plot
2) Plotting is a Communist Science

Therefore -- at least until sometime after the dueling political conventions -- I suggest that we agree to disagree on these matters and move on to topics more of interest to the rest of the members of the forum -- e.g. interesting architecture, transit and history, and of course the other "safe" topics identified by "underground"