We already have a high speed transportation system it's called the airplane

America’s high-speed rail shambles: Where has all the money gone?

This time last year, President Obama promised a brave new world for America’s train spotters, committing $8 billion to fund 13 high-speed rail projects around the US.

But 12 months later, where has all the money gone?

The comically inept projects range from Ohio’s (now abandoned) plan for a $400 million “high speed” train averaging just 39 mph, to Florida’s 84 mile, $2.7 billion plan to link two cities that are only 90 minutes apart by road. Not to be outdone, Iowa managed to receive $1 billion for a line to Chicago that will be slower than the current bus service. But, even in such illustrious company, California’s high speed shambles stands out: a “train to nowhere” costing $4.15 billion to connect the “unincorporated community” of Borden to the tiny town of Corcoran (combined pop. ~25,000).

While some of these daft plans have been revised—California will now spend another billion dollars (that’s $45 million per mile) to extend the line to two medium-sized cities—this madness reflects the logic of pork-barrel federal spending. Simply put, free money is hard to turn down. The Tampa-Orlando line costs nearly $3 billion and, as Orlando’s Mayor admits, “I can’t say it makes sense”. But with the federal government covering 90 per cent of the cost, he won’t say no.

There is, however, some method behind these “slightly faster” rail projects: if states spend a bit of “free” federal funding now, they won’t be able to stop spending their own money later. Obama has an ideological commitment to HSR – it’s cool, European and seems green (although it’s not really) – but normally states would reject such projects as unaffordable boondoggles. Since the fed’s paying for the upfront costs, however, most state politicians have opted for the “free” shiny ribbon-cutting ceremony (with the notable exception of Ohio and Wisconsin, whose Republican governors rejected HSR funding).

And once a project gets started, it will always be hard to kill, even if it is unnecessary and expensive. Vested interests spring up to defend existing spending and sunk cost fallacies justify additional investment – e.g., California’s “if we don’t spend another $38 billion to reach San Francisco, our $5.5 billion train to nowhere will be useless” plan. As with healthcare reform, Obama is playing a long-term game, cleverly exploiting the logic of path dependency.

As usual, of course, taxpayers lose out. While the up-front costs may be covered, ongoing costs will need to be subsidised by the lucky state taxpayers. There’s a reason why private investors are mysteriously absent from HSR projects: Only two high speed segments in the world break even (Paris-Lyons and Tokyo-Osaka). Elsewhere ordinary taxpayers subsidise cushy rail travel for the relatively well-to-do (as HSR lines are almost always premium services).

There’s no reason to expect that America’s next generation HSR lines will be any different. In California, for example, the rail authority’s “plan” (if it can be dignified with such a name) to break even first projected 117 million annual riders but now only 39 million (a still-ludicrous figure; the entire nation-wide ridership of Amtrak amounts to 29 million people). If ridership doesn’t reach these unrealistic levels, California’s hard-pressed taxpayers will pick up the tab.

Coming back from travel in Europe, it’s easy to wish that all US train journeys were as a simple, quick and elegant as France’s TGV. HSR is sexy and Americans suffer from train envy. But the economics simply don’t make sense given America’s sprawling landscape and heavy investment in road transport. America will spend the next few years dealing with a deficit crisis – and, probably, state bankruptcies – and the last thing we need is to get aboard HS