>Never if you throw out something obvious like spending less money. But who expects intelligence when it comes to politiics.

While there are lots of things that I would be happy to spend less money on, it always amazes me that many people will readily accept the premise that “cutting taxes will result in more revenue”, but have a hard time with the premise that “increasing spending can reduce the deficit”.

Both supply-side and demand-side actions can work to achieve seemingly contrary goals, depending on the situation. If you have a situation like in the 1970s, where a combination of high taxes and high inflation was making any sort of economic activity unattractive, then cutting taxes (and other fiscal and monetary policy changes) can and did have the affect of raising revenue.

Today, though, and in the 1930s, we have a situation where spending money can actually result in more tax revenues than is spent, as the money spent filters through the economy and is taxed at various points, and the increased economic activity spurs more activity generating even more revenue.

Bottom line: Economic stimuli, when targeted well, is not the equivalent of the government burning money in a big pile. But it can be detrimental to the interests of certain elites, who do well in a recession (deflation is good for those who have lots of money), as well as those who have made the political calculation that their party will benefit from a recession that continues past next November.

Never if you throw out something obvious like spending less money. But who expects intelligence when it comes to politiics.

Seriously though if they make a new front-loaded transportation bill they should at least give 25% of the 150 Billion directly to transit so $37.5 Billion, split it $20 Billion to HSR and $17.5 Billion to local transit projects. They should also do 5% of the bill or another $7.5 Billion to TIGER type grants. Then give the rest to roads to make it get enough votes. I mean I wish there could be even more for transit oriented stuff but I just don’t see it happening especially in light of the problems with passage of the health care bill.

The way out if we are to have a Main Street Jobs bill is to provide resources to re-tool auto plants to build buses and trains.

It won’t work. Unlike with cars, most of the cost of transit is not the equipment, but the operations and maintenance. Trains and buses are very cheap compared to how many people ride them.

For example, replacing the entire New York City Transit train fleet would cost about $10 billion, and buy rolling stock that depreciates over 40 years. Replacing the entire bus fleet would cost $2.5 billion, depreciating over 15 years. But the subway and buses take about 4.5 million cars off the road, which would cost $65 billion, depreciating over 10 years. It’s this factor-of-16 difference in cost per year that ensures Toyota and GM employ hundreds of thousands of workers each, whereas Bombardier Transportation employs 30,000.

The way out if we are to have a Main Street Jobs bill is to provide resources to re-tool auto plants to build buses and trains.

Absolutely not.

A viable bus manufacturing industry already exists, although the U.S. squandered its expertise in this field to Canada and Europe. These companies already comply with Buy America regulations that force them to build at least 60% of buses in the U.S.

These provisions, in turn, help to restrict competition to already established coach builders.

The longer-term problem is what to do with the factory workers once the “bus and train” bubble pops. Unlike, say, automobiles, where there are several different markets that help create secular demand, transit vehicles are highly durable vehicles with very few buyers. Buses must last at least 12 years; trains are commonly operated for 30-50 years. That’s too long of a cycle to commit to a stimulative transit vehicle manufacturing sector.

If we’re going to tax something, tax what is doing the *damage*: tax gas, tax heavier vehicles, stop subsidizing roads and air travel more than transit, and make developers pay for extending roads and sewers. We’ll get a lot more than $150 million if we do that; and, the taxation will also encourage people to use transit.

Service is being cut throughout California, in Chicago, Cleveland, Detroit (25%), St Louis, (pick a city).

The way out if we are to have a Main Street Jobs bill is to provide resources to re-tool auto plants to build buses and trains. Next we need to provide transit systems funds, with strict maintenance of effort provisions to prevent local fund shifting, to OPERATE the service, at least in the start up years.

It is silly to build infrastructure when the people who operate it are being laid off. We need Eisenhower II but this time for transit.