I’ve posted today’s entry in my series on the issues, this one on energy policy, at The Glittering Eye.
Please join in the discussion and post your own thoughts on the subject!
The previous entries in the series are:
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You state in your essay that you are opposed to the market distorting affect of subsidies (although I have a problem with not taxing something to be considered a subsidy). Are you equally opposed to the market distorting effects of taxing specific products or services (other than the simple sales taxes that apply equally to everything)?
As with the rest of your series, I find myself agreeing with you about 80-90%. On this one, I don’t think we should suspend federal highway construction. I don’t have a big problem with the government being involved in large-scale infrastructure projects like road and rail construction because of the massive transaction costs involved in trying to do something like that privately.
I share your distate for subsidies (my answer to Choey’s question would be a qualified yes, with the exception that I’m okay with pigovian taxes to correct for negative externalities, such as a tax on pollution), but I think we can seperate the subsidy from the project. For federal highways, this means that all new highway construction would have to be paid for by user fees (tolls and gas taxes).
I’d ditto Maniakes’s take on sales taxes. As a general principle I don’t think governments should be picking winners and losers in the economy.
Eric, the issue of federal subsidizing of rail network redevelopment and modernization is one in which I disagree with you.
We need an electrified, double-tracked steel interstate transportation system suitable to take electric-powered freight and passenger trains safely at 100-120 mph – mainly on the 36,000 miles of STRACNET mainline rail. And we need it before the world oil supply terminally peaks, which is now estimated to have already begun in spring 2005, with the plateau of petroleum availablility compared with petroleum demand dropping away sometime between 2012 and 2018.
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In company with that, America needs a new national electric power transmission grid and a comprehensive system of wind-powered electricity generators and solar collectors for the same purpose, which most economically can be erected and put in use along the country’s rail transit right of way, using freight cars and rail-mounted cranes to take advantage of lower haulage and construction costs of the equipment to be erected along the 36,000 mainline routes and numerous spur-track secondary routes.
According to engineering estimates I have seen, the bulk of this could be done with about a year of organizing and planning and about five years of on-ground construction. Nothing about it is new or has to be re-invented.
But no such project on the scale described here ever has been done by a single private organization. For that, we need national control of the rights of way, the trackage, the electricity generating system and the ROW-based power line grids. The same way airports and and highways are essentially controlled by the federal government. The rail tranport companies, of course, would still control their own trains, which would be free to travel over any part of the national system, presumably for payments of fees similar to those paid by barge haulers on the Upper Mississippi River with with its system of locks and dams controlled and operated by the US Army Corps of Engineers.
As a matter of fact, it would not be a bad idea to turn over the entire massive rail corridor project to the USACE. They were the agency that built the Panama Canal in the early 20th century.
If and when the system briefly summarized above is planned and built, the electrified rail system would be able to haul most of the country’s interstate freight at a cost that would become cheaper in time in comparison with petrodiesel over-the-road haulage. Because it always is cheaper to generate power than it is do dig it out of the ground.
By the way, rail transport, then steam-powered, was the way the vast bulk of America’s freight was hauled all the way through World War II.
We must do this soon, Eric. Because otherwise, when the oil supply and our access to it begins it permanent and final worlwide shrinkage, we must have a fully functional alternative. Failing that, our national empire on this continent and the economy on which it depends, will dwindle and eventually break apart.
Arnold Harris
Mount Horeb WIÂ
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