Tuesday, February 22, 2011

Reckless Spending -- Panos' Version

Thomas Sowell wrote a great article on Reckless Spending in Real Clear Politics. I copied his article below and modified it for our Honolulu rail situation. The bold words are my edits to Sowell's article. Small world really... Washington reckless spending and Honolulu reckless spending is one and the same.


Nothing more clearly illustrates the utter irresponsibility of Peter Carlisle than his advocacy of "rail." The man is not stupid. He knows how to use words that will sound wonderful to people who do not bother to stop and think.

High-speed rail may be feasible in parts of Europe or Japan, where the population density is much higher than in Hawaii. But, without enough people packed into a given space, there will never be enough riders to repay the high cost of building and maintaining a high-speed rail system.

Building a rail system between Kapolei and Honolulu may sound great to people who don't give it any serious thought. But we are a more spread-out country than London, Paris or Tokyo.

However little Mayor Carlisle knows or cares about economics, he knows a lot about politics-- and especially political rhetoric. "Rail" is simply word to justify continued expansion of government spending. So are words like "investment in education" or "investment" in any number of other things, which serves the same political purpose.

Who cares what the realities are behind these nice-sounding words? Carlisle leave that to the economists, the statisticians and the historians. His point is to win the votes of people who know little or nothing about economics, history or statistics. At the same time that Carlisle held his fake "ceremonial groundbreaking," he also blanketed his supporters with $150 to $1,000 per person Election 2012 fundraiser solicitation!

To talk glibly about spending more money on "rail" when the national debt has just passed a milestone, by exceeding the total value of our annual output, for the first time in more than half a century, is world-class chutzpa. The last time the U.S. national debt exceeded the value of our entire annual output, it was due to the cost of fighting World War II.

When World War II ended, in less than four years of American participation, we began paying down the national debt. But our current national debt has been expanding by leaps and bounds in peacetime-- and with no sign of an end in sight for the next decade.

Since more than 40 percent of our national debt is owed to foreigners, this means that goods and services produced by Americans, equal in value to more than 40 percent of our current output, will have to be sent overseas, free of charge, by either this generation or the generations that follow.

Since the generations that follow cannot vote today, the Obama administration's latest budget keeps the spending increasing, while regaling us with wonderful plans for big reductions in government spending-- years from now, after Obama is gone.

Make no mistake about it, spending wins votes, and votes are the ultimate bottom line for politicians. If fancy words and lofty visions are enough to get the voters to go along with more spending, then expect to hear a lot of fancy words and lofty visions.

One of the most successful political ploys is to promise people things without having the money to pay for them. Then, when others want to cut back on the things that have been promised, blame them for lacking the compassion of those who wrote the checks without enough money in the bank to cover them.

If all else fails, politicians can always say that we can pay for the things they promised us by raising taxes on "the rich." However, history shows that, when tax rates go up to very high levels, people put more of their money in tax shelters, so the government ends up collecting less revenue than before.

But history is so yesterday. What is far more exciting is to think of rail in the future, even if it is speeding us toward bankruptcy.