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Posted at 6:45 AM ET, 12/10/2010

Wonkbook: $858 billion price tag on tax deal; Obama weighs tax reform; AFL-CIO opposes South Korea trade deal

By Ezra Klein

PH2010120906550.jpg

Washington, we've got a price tag: $858 billion. About $450 billion of it is the tax cuts for income under $250,000. The tax cuts for for income over $250,000 and the estate tax cut add in another $125 billion or so. Then there's another few hundred billion in stimulus -- stimulus that could, like the Bush tax cuts before it, get extended (notably the payroll tax). As Charles Krauthammer argues in his column today, the price tag here is larger than the original stimulus.

But though Krauthammer believes Democrats should be happy, they're don't agree. Sen. Chuck Schumer -- who was previously pushing a tax deal that would've extended the cuts for all income beneath a million dollars -- is leading opposition in the Senate. House Democrats broke into a chant of "just say no" during their caucus meeting yesterday. And the Republicans' successful effort to filibuster repeal of Don't Ask Don't Tell is not going to convince the liberal base of the value of compromise.

A month ago, few liberals would've believed they'd have the opportunity to spend $850 billion -- and possibly more -- on a weak economy, and even fewer would believe they'd let $850 billion not be spent if there was anything they could do to help it. Republicans, meanwhile, were running on reducing the debt, and claiming that success would come when Washington ceased being so fiscally irresponsible. Now it's Democrats who're skeptical of a stimulus bill -- in part because of its expansion of the deficit -- and Republicans who've stopped using the word "deficit" and are celebrating, in these temporary tax cuts, a typically Keynesian stimulus package.

Top Stories

Obama is considering pressing for tax reform next year, reports Jackie Calmes: "While administration officials cautioned on Thursday that no decisions have been made and that any debate in Congress could take years, Mr. Obama has directed his economic team and Treasury Department analysts to review options for closing loopholes and simplifying income taxes for corporations and individuals, though the study of the corporate tax system is farther along, officials said. The objective is to rid the code of its complex buildup of deductions, credits and exemptions, thereby broadening the base of taxes collected and allowing for lower rates -- much like a bipartisan majority on Mr. Obama’s fiscal commission recommended last week in its final blueprint for reducing the debt through 2020."

The tax deal will cost $858 billion over ten years, report Janet Hook and John McKinnon: "The Senate unveiled final details of a broad tax bill--and its 10-year price tag of $858 billion--and began debate Thursday night on the package, a significant step after two years of gridlock over how to treat expiring tax cuts enacted under former President George W. Bush. Without action, income taxes on nearly every American are due to rise on Jan. 1...But in the House, Democrats were in open revolt. In a closed-door gripe session, they chanted 'Just Say No,' capping a remarkable day of political theater before passing a nonbinding resolution that said the tax agreement shouldn't be considered in the House unless changes were made."

Obama won the tax standoff and humiliated the Republicans, writes Charles Krauthammer: "Barack Obama won the great tax-cut showdown of 2010 - and House Democrats don't have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package...Some Republicans are crowing that Stimulus II is the Republican way - mostly tax cuts - rather than the Democrats' spending orgy of Stimulus I. That's consolation? This just means that Republicans are two years too late. Stimulus II will still blow another near-$1 trillion hole in the budget."

"At great cost that will have to be paid after this newest free lunch, the package will add as much as 1 percent to GDP and lower the unemployment rate by about 1.5 percentage points. That could easily be the difference between victory and defeat in 2012. Obama is no fool. While getting Republicans to boost his own reelection chances, he gets them to make a mockery of their newfound, second-chance, post-Bush, Tea-Party, this-time-we're-serious persona of debt-averse fiscal responsibility."

Peter Orszag is headed to Citigroup: http://nyti.ms/hjJ9VQ

Organized labor plans to fight the South Korea trade pact, reports Howard Schneider: "The AFL-CIO, the United Steelworkers, the International Association of Machinists and the Communications Workers of America all said they would oppose the deal when it comes before Congress next year, arguing that it will drain U.S. manufacturing jobs and does not include worker and other protections unions had hoped President Obama would demand. Labor opposition is not uniform: the United Auto Workers, which along with automakers such as Ford Motor Co. was closely involved in the final negotiations over the agreement, has endorsed it. And officials with the United Food and Commercial Workers union have supported it for lowering agricultural tariffs and probably boosting sales of U.S. meat and other foods."

Got tips, additions, or comments? E-mail me.

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Swedish pop interlude: Robyn's "Call Your Girlfriend".

Still to come: Chuck Schumer is leading Senate opposition to the tax cuts; Ron Paul will chair the Fed Subcommittee in the House; the House has passed the doc fix; Wisconsin and Ohio are losing high speed rail funding; businesses are negotiating ad hoc deals in Cancun; and baby parrots in bowls.

Economy

Chuck Schumer is leading the Senate fight against the tax deal, reports Shailagh Murray: "To Schumer (N.Y.), Obama's decision to accept a two-year extension of all the tax cuts enacted by President George W. Bush - even at the highest income levels - is a needless capitulation to resurgent Republicans. Schumer wanted the president to push harder to extend the tax cuts, set to expire at year's end, only for middle-class families. But to the White House, it is Schumer who is acting recklessly by seeking to wage class warfare with just days left on the legislative calendar, risking the health of the economy and the pocketbook of every middle-class household with his threat to carry the fight into next year."

At least 54 House Democrats will oppose the deal: http://politi.co/gTjdCk

Ron Paul will chair the Fed subcommittee in the House, reports Felicia Sonmez: "Texas Republican Rep. Ron Paul is poised to chair the House Domestic Monetary Policy Subcommittee, putting the gavel of the panel overseeing the Federal Reserve into the hands of one of the central bank's most outspoken critics. Rep. Spencer Bachus (R-Ala.), the incoming chairman of the House Financial Services Committee, announced Thursday that Paul will head the subcommittee when Republicans assume the majority in the 112th Congress. 'This is the leadership team that crafted the first comprehensive financial reform bill to put an end to the bailouts, wind down the taxpayer funding of Fannie Mae and Freddie Mac, and enforce a strong audit of the Federal Reserve,' Bachus said in a statement."

The IRS is considering amnesty for offshore tax evasion: http://on.wsj.com/gZkFmx

Max Baucus is an impediment to progress on the deficit, writes Steven Pearlstein: "While Max's vote against the [Bowles-Simpson] plan surprised nobody, even commission members were surprised by his ludicrous explanation that it was bad for rural America...While voters and politicians from rural states talk a good game about cutting the government down to size, it turns out they are the biggest beneficiaries of the federal tax-and-spend machine. The conservative Tax Foundation calculates that the most rural states receive somewhere between $1.50 and $2 in federal spending for every dollar of federal taxes they pay; urban states receive 60 cents to 90 cents."

Obama had "a very good week," writes David Brooks: "The big story of the week is that Obama is returning to first principles, re-establishing himself as a network liberal. This isn’t a move to the center or triangulation. It’s not the Clinton model or the Truman model or any of the other stale categories people are trying to impose on him. It’s standing at one spot in the political universe and trying to build temporarily alliances with people at other spots in the political universe. You don’t have to abandon your principles to cut a deal. You just have to acknowledge that there are other people in the world and even a president doesn’t get to stamp his foot and have his way."

Adorable animals in ceramics interlude: Baby parrots in bowls.

Health Care

The doc fix has passed the House, reports Robert Pear: "The House gave final approval on Thursday to a bill that would avert a 25 percent cut in Medicare payments to doctors by freezing reimbursement rates at current levels until the end of next year. The bill goes now to President Obama, who hailed the action by Congress and promised to sign the legislation...The cost will be offset by changing a provision of the new health care law that offers subsidies to lower-income people to help them buy health insurance, starting in 2014. The bill allows the government to recoup more of any overpayments that people might receive if they misstate their income or earn more than they expect in a given year."

The Senate GOP blocked health care for 9/11 first responders: http://on.wsj.com/hNspuP

Domestic Policy

Ohio and Wisconsin are losing high speed rail funds, reports Amy Merrick: "Gov.-elect Scott Walker in Wisconsin and Gov.-elect John Kasich in Ohio campaigned on pledges to stop passenger-rail projects in their states. On Thursday, they got their wish. U.S. Transportation Secretary Ray LaHood rescinded nearly $1.2 billion that had been allocated to Wisconsin and Ohio for new train lines. Wisconsin, which received $810 million for a passenger train between Madison and Milwaukee, will have to forfeit the entire amount. Ohio must give up $385 million of the $400 million allocated for a train connecting Cincinnati, Columbus and Cleveland. The funds will be redirected to train projects in 14 states. California and Florida will receive the largest portions, up to $624 million and $342.3 million, respectively."

Senate Democrats are delaying a vote on the DREAM Act, report Shankar Vendantam and David Fahrenthold: "Senate Democrats shifted strategy Thursday on legislation that would provide a path to citizenship for some people who were brought to the country illegally as children, calling off a vote that was nearly certain to fail and announcing that they are determined to pass a different version later this month. The House passed its version of the DREAM Act on Wednesday...Senate Democrats voted to pull their bill, allowing them to take up a version identical to the House bill. If the Senate were to pass that version, the legislation would go directly to President Obama for his signature, skipping the process of reconciling the two chambers' measures."

Newt Gingrich is the most pro-immigrant 2012 contender, writes Eduardo Schumacher-Matos: http://wapo.st/ifdYCZ

N64 interlude: "Song of Healing" from The Legend of Zelda: Majora's Mask played on wine glasses.

Energy

The tax deal will include extensions of renewable energy incentives, report Patrick Reis and Darren Goode: "Senators and the White House have apparently agreed on a one-year extension of a key renewable energy grant program, according to key Democratic senators. Sens. Tom Harkin (D-Iowa) and Kent Conrad (D-N.D.) said the program that gives cash grants to renewable developers will make it. The actual draft language should be made available Thursday evening. The lack of paper has caused some nervousness on the Hill among renewable energy backers. Wednesday, 81 House Democrats sent a letter asked their leaders to include a two-year extension of the grant program, which was originally part of the 2009 stimulus bill and is set to expire at year’s end."

The Obama tax deal could hurt the green economy, writes Brad Plumer: "The renewable industry will have a tough time gaining a firm footing in the market if, every year or two, there's glaring uncertainty about whether Congress will continue to offer support. Wind and solar companies are having a difficult time making investment decisions, which may help explain why wind generation dropped this year, after a boom in 2009. (Oddly enough, this is one "economic uncertainty" argument you rarely hear Republicans make.) An alternative approach would be to extend the tax program for a longer period of time--or go further and pass a bill that requires utilities to get a certain percentage of their power from sources like wind, solar, or biomass. But the latter idea died in the Senate this year, so clean-energy producers are back to fighting for scraps."

Businesses are using the Cancun conference to make ad hoc agreements, report Juliet Eilperin and William Booth: "In response to growing frustration that the U.N. climate negotiations are not producing real-world results, individual nations, states and business are cobbling together patchwork solutions to preserve forests, produce clean energy and scrub pollution from the air. Under this new approach, businesses in California will offset their greenhouse gas emissions by funding tropical forest preservation in Mexico and Brazil; Japan will help pay for nuclear power plants in developing nations; and South Korea will invest in promoting renewable energy at home. But the central question remains: Will a bottom-up network of ad hoc arrangements and bilateral deals be enough to avert dangerous climate change?"

CHART - Countries by total and per capita emissions: http://wapo.st/hCsYFG

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams. Photo credit: Brendan Smialowski Photo

By Ezra Klein  | December 10, 2010; 6:45 AM ET
Categories:  Wonkbook  
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Next: The Republicans' smart bet

Comments

So $850 billion for highly stimulative jobs programs is totally going to blow up the debt, but $850 billion for mildly if at all stimulative tax cuts is a great idea?

Posted by: stonedone | December 10, 2010 8:14 AM | Report abuse

Krauthammer's suggestion that Obama has won on this tax deal is proof that most conservatives feel this tax deal is like manna from heaven.

It is interesting that this is one of the few times I've ever seen a professional conservative admit in writing that tax cuts actually cause deficits.

This article by Krauthammer is a means for him to pivot in a way to help secure the tax deal (by trying to convince lefties that Obama has won a major victory for them) so that he can, one, salivate at the prospect of better tax rates for himself, and two, have the means to start criticizing Obama in print for increasing the deficit with this deal (even as Krauthammer secretly gloats and hand-wrings over the personal fortune he will realize).

In short, it is evident by Krauthammer's false portrayal as Obama-as-victor (something Krauthammer would never do unless there was something to gain from it) and by the lack of Krauthammer's typical visceral hatred for the man, that Krauthammer wants both the deal and to then criticize Obama later for it for reasons of deficits. This will be the GOP playbook going forward.

Posted by: lauren2010 | December 10, 2010 8:25 AM | Report abuse

It seems I am a genius.

Only yesterday I suggested on this blog that Obama's best path forward from this point was to declare he would undergo a major effort to reform the tax system.

And now this morning he has decided to consider my advice.

Posted by: lauren2010 | December 10, 2010 8:37 AM | Report abuse

OBAMA, Let's 99ERs Crash and Burn, Golden Parachutes For The Rich!

2011 Officially The Year Of The HOBO!
Should You Learn The Language?

Today graffiti is prevalent on walls, residences, businesses and the infrastructure in America. A result
of gangs slinging communication at each other while leaving the general public puzzled and bewildered.

But this isn't the first time that indigenous groups have used code to converse with each other. In the
1930's millions of Hobos developed their own unique system of symbols which could be found on street curbs buildings and crossroads nationwide.

The meanings of the symbols reached the vagabonds riding the rails that arrows and geometric shapes were a communication highway. Will this truly American underground dialect be called back for today's unemployed survival?

When millions of unemployed patriots are kicked to the streets to be belittled,
starve and disenfranchised, then a peaceful outcome is unpredictable. Add to this how many new HOBOs recently working class believe their situation is their own fault? Consider they know an unregulated Wall Street took them down and then says forget about it!

Do we really want our National Guard posted and on stand bys to prevent civil unrest? Is it worth it to the GOP Tea Party millionaires at the tax cut trough, to increase costs in homeland security for all because of their obsessive compulsive contempt for the unemployed? Will it be worth then to leave the 99ER unemployed extension in the abyss?

Artist - Country Carl Dot Com - of the 99ERS New Depression Blues Video,
Hopefully you won't have to HOBO UP!
http://www.youtube.com/watch?v=tM6CuCjUTDK

Posted by: countrycarl | December 10, 2010 8:43 AM | Report abuse

OBAMA, Let's 99ERs Crash and Burn, Golden Parachutes For The Rich!

2011 Officially The Year Of The HOBO!
Should You Learn The Language?

Today graffiti is prevalent on walls, residences, businesses and the infrastructure in America. A result
of gangs slinging communication at each other while leaving the general public puzzled and bewildered.

But this isn't the first time that indigenous groups have used code to converse with each other. In the
1930's millions of Hobos developed their own unique system of symbols which could be found on street curbs buildings and crossroads nationwide.

The meanings of the symbols reached the vagabonds riding the rails that arrows and geometric shapes were a communication highway. Will this truly American underground dialect be called back for today's unemployed survival?

When millions of unemployed patriots are kicked to the streets to be belittled,
starve and disenfranchised, then a peaceful outcome is unpredictable. Add to this how many new HOBOs recently working class believe their situation is their own fault? Consider they know an unregulated Wall Street took them down and then says forget about it!

Do we really want our National Guard posted and on stand bys to prevent civil unrest? Is it worth it to the GOP Tea Party millionaires at the tax cut trough, to increase costs in homeland security for all because of their obsessive compulsive contempt for the unemployed? Will it be worth then to leave the 99ER unemployed extension in the abyss?

Artist - Country Carl Dot Com - of the 99ERS New Depression Blues Video,
Hopefully you won't have to HOBO UP!
http://www.youtube.com/watch?v=tM6CuCjUTDK

Posted by: countrycarl | December 10, 2010 8:44 AM | Report abuse

I have a question regarding the estimate of $858 billion that the Obama-Republican tax deal would cost.

A related link on the Post's business page it entitled "What the tax-cut extension would mean for you," shows the following:
Plan 1, Obama/GOP: Cost: $900 billion. New tax rates are slightly lower than current tax rates.
Plan 2, Bush tax cuts: Cost: $3.9 trillion. New tax rates are the same as current tax rates.
Plan 3, Obama’s original plan: Cost: $3 trillion. New tax rates for those with incomes above $250,000 per year are slightly higher than current tax rates.
Plan 4, Let all tax cuts expire: Cost: $0. New tax rates for everyone are slightly higher than current tax rates.

How can plan 1 cost 1/4th as much as plan 2 while everyone will be paying less in taxes? I'm not an economist, but I am smart enough to know that lowering taxes costs more than leaving taxes as is. What's going on here?

These estimates of cost come from the OMB. Has anyone at the Post asked the OMB to explain their basis for these estimates? Doesn't anyone else think these cost estimates look inconsistent?

Posted by: patriot17 | December 10, 2010 9:25 AM | Report abuse

Ezra, when you start quoting a psychiatrist (Krauthammer) to justify the tax deal, maybe you should go back to Krugman!

Going back to what I said yesterday, there is very little stimulus in this bill. We are in a jobless recovery, and have been for about 9 months to a year. The GDP will indeed rise as it HAS been doing for most of this time. These policies will not produce anything close to the millions of jobs that the President has promised though. If we get down to around 9% by the end of next year, that ain't bad. Zandi was predicting us well over 10% just last week on the jobs report.

Posted by: 54465446 | December 10, 2010 9:26 AM | Report abuse

There won't be any REAL audit of the Fed anytime soon, Paul notwithstanding. The Fed has a tremendous amount of near worthless crap on their books leftover from TARP. I don't know how, but they will avoid exposing that stuff at all costs.

If only we could lose ALL high speed rail funds, but since continuing ethanol subsidies are going to pass the Senate, I guess the second greatest boondoggle in the country will continue right along too!

"Wind and solar companies are having a difficult time making investment decisions, which may help explain why wind generation dropped this year, after a boom in 2009."

Hmmm, that would be one totally incorrect reason, but the real reason is that Nat Gas fell to an all time low somewhere around $3.50, earlier this year making all alternative energy investments unviable

Posted by: 54465446 | December 10, 2010 9:38 AM | Report abuse

If there is one thing Obama can't rationally be criticized for, it's not being generous enough with unemployment benefits.

Oh, and F*** you Wisconsin. The fact that Minnesota won't get decent rail transportation because the people of Wisconsin are idiots makes me want to spit on the next cheesehead I see.

And Ezra puts up 53 posts in row talking about how the right is nuts for thinking 'uncertainty' has any effect on the economy (despite at least one post in comments every time pointing out the big issues in the energy sector when it comes to uncertainty), and now a lefty points out that uncertainty is a problem for the economy and he links approvingly. Nice!

To Krauthammer, for Obama to 'embarass' Republicans would require them to have a sense of shame.

Posted by: eggnogfool | December 10, 2010 9:51 AM | Report abuse

While I approve of Ron Paul's distrust of the Fed, I find it unfortunate that he is 100% wrong about everything relating to economics. Given their choice of science committee chair, it appears that Paul's economics make him well suited for this chair though.


@54465446
High speed rail will be very viable in about 5 years. Happily it will be far more expensive to build them by that point.


@ patriot:
plan 1 is two years, plans 2-4 are permanent (though measured over a 10-year window).

Posted by: eggnogfool | December 10, 2010 10:00 AM | Report abuse

CHUCK AND BUCK (S&F) SCHUMER KNOWS FIVE DS ALREADY VOTED AGAINST MIDDLE-CLASS TAX CUT PLAN. WHAT'S HE UP TO

Posted by: jackjudge4000yahoocom | December 10, 2010 10:08 AM | Report abuse

Dear Chuck Schumer:

I love you, but shut up.

You are not a moron. You KNOW this is the best deal we can get.

And you know this is your fault.

If you'd demanded a functioning parliamentary body instead of kowtowing to the ego-stroking priority of the filibuster, we would have passed much better tax cut legislation 6 months ago. Oh, as well as DADT, energy policy, stronger finreg, a better stimulus (lower unemployment!) and a half dozen other very good bills. We'd have passed HCR by August or September, without a cornhusker deal or a 15 point drop in the polls. We'd probably still have the House because they'd have had something to run on.

But I guess it's way more important to protect completely outdated points of personal privilege for out-of-touch Senators than it is to, you know, do the job you are paid to do.

Rather than spend your time trying to snatch an even bigger defeat from the jaws of the closest thing we'll get to victory on the tax cuts, it would be far more productive to begin campaigning against the filibuster that has cost your party and your nation so dearly. Even if you get nothing, it's a more productive use of your time than opposing a bill so you can...um, what's the next move here? I mean, after the petulant photo-op?

Quit pointing fingers at Obama. It's not his fault he's in a no-win situation. It's yours. FIX THE SENATE.

Posted by: theorajones1 | December 10, 2010 10:11 AM | Report abuse

eggnofool:

Glad to chat with you. Some of your stuff is interesting.

In what way will high speed rail be viable? I don't want to comment until I understand your point.

I don't agree with your point about Paul. He simply has a different starting point than the rest of us. His view of economics is very faithful to his core principal, namely hard currency. If you don't accept that, then of course, nothing else follows. It's almost like the difference between a believer and an atheist, not having a common ground on which to build.

Posted by: 54465446 | December 10, 2010 10:19 AM | Report abuse

@theorajones1:

As failing to do anything would be far better than passing any of the plans currently under consideration (including the Dem version), and Schumer's preferred plan is a step up from the current compromise,

I for one endorse Schumer's effort to make the choice be between the Dem plan and nothing. That said, even if he had 40 votes to back him up (which he doesn't), he'd still cave, so the whole show is pretty irrelevant.

Posted by: eggnogfool | December 10, 2010 10:21 AM | Report abuse

@5446:

Just as a gas price issue. What do you think a barrel costs 5 years from now? 10?

I just see the era of free petrol coming to an end in the short term.

Posted by: eggnogfool | December 10, 2010 10:33 AM | Report abuse

Regarding Ezra's comment about the "green economy" I read a story just today about how many "green funds" are doing so poorly that they have taken to calling Ebay a green company so they can try to boost their returns.

Posted by: 54465446 | December 10, 2010 10:33 AM | Report abuse

A couple days ago, the Washington Post reported the two-year cost to be $990b. About $280 billion of it is the tax cuts for income under $250,000. The tax cuts for income over $250,000 was $79b and the estate tax cut was $68b. Does Klein bother to read the paper?

Also, don't call it a compromise. If you want to spend $280 and I want to spend $360, you don't compromise by spending $990. Collusion would be a better name.

Posted by: kitchendragon50 | December 10, 2010 10:35 AM | Report abuse

eggnofool:

You are aware though that highspeed rail will have a tiny, tiny ridership, no matter what. It does not carry freight. It will not carry any but high end customers.

You are correct about rising gas prices, but given the above factors, which you are free to dispute if you have evidence, wouldn't the billions of dollars be much better spent elsewhere?

Posted by: 54465446 | December 10, 2010 10:42 AM | Report abuse

"Oh, and F*** you Wisconsin. The fact that Minnesota won't get decent rail transportation because the people of Wisconsin are idiots makes me want to spit on the next cheesehead I see."

eggnogfool,

If Minnesota wants decent rail transport but Wisconsin doesn't place much value on it, can't Minnesota finance it itself?

Posted by: justin84 | December 10, 2010 10:46 AM | Report abuse

@54465446:
"You are aware though that highspeed rail will have a tiny, tiny ridership, no matter what. It will not carry any but high end customers."

100,000 people a day go through the Twin Cities airport; I can't get a quick number on how many of those are going to or from Chicago (as a destination or a flight hub), but 10% is probably a low end estimate. I also can't provide an easy number on how many per day make the 8-hour drive down 94 to Chicago, but I'd expect a lot of them to prefer rail, especially in an era where everyone has a laptop that can play movies, games, and support a mobile office. How many people need to use it for it to be considered more than a 'tiny' ridership?


"It does not carry freight."

It doesn't exist; it doesn't carry anything. If it existed, and air transportation became prohibitively expensive, which we appear to agree may happen soon, the overnight mail industry would be expected to look around at other options.

Everything hinges on the price of a barrel.

Posted by: eggnogfool | December 10, 2010 11:40 AM | Report abuse

eggnofool:

There are existing rail lines between the cities that are not currently used by many of these same travellers. Rail can never beat air for speed, unless you include the time spent frisking passengers.

Aren't those same roads used to carry the business of these cities, and wouldn't the money spent on roads benefit not only the haulers of freight but those for whom the price of the ticket is too prohibitive?

Remember by definition, HSR makes few or no stops. It ONLY benefits those who are specifically making that trip, say Minneapolis-Chicago. Road improvements benefit every town along the way.

No railroad in the country makes a profit on passenger fare alone. That is an established fact that you can look up anywhere online. To keep these roads viable, not only would construction have to be subsidized, but operation as well.

Posted by: 54465446 | December 10, 2010 12:20 PM | Report abuse

(1) How much of a profit does the federal government get off the freeway system?

(2) You appear to have the perspective "rail is unpopular, therefore rail is unpopular". My perspective is that "slower and more expensive methods of transportation are less popular than faster, less expensive methods". I would expect this to hold true if rail became faster (than driving) and less expensive (then flying, and eventually driving) than alternatives.

Posted by: eggnogfool | December 10, 2010 1:27 PM | Report abuse

eggnofool:

Thanks for the chat, I am enjoying it.

1) The government proifts from increased tax revenue from commerce generated by traffic between cities. HSR does not increase commerce because it carries only people (and not many of them), not freight, and only stops at one or two destinations.

2) Even current rail is probably already fasten than driving, especially at rush hour times. If gas were to get as expensive as you suggest, I think the more likely alternative would be voting with your feet by either moving closer to their place of business, or getting a job closer to their residence. Remember, we are talking about relatively well-off people, not those who are limited in their options.

Posted by: 54465446 | December 10, 2010 1:40 PM | Report abuse


You guys should stop complaining because, one the health care we have now isnt as good as it was supposed to be. also the law has just been signed so give it some time. so if u want to say u have the right to choose tell that to ur congress men or state official. If you do not have insurance and need one You can find full medical coverage at the lowest price check http://ow.ly/3akSX .If you have health insurance and do not care about cost just be happy about it and trust me you are not going to loose anything!

Posted by: dionflowers | December 11, 2010 4:49 AM | Report abuse

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