As California faces a large budget deficit and a worsening economy, some are starting to ask whether we can afford this project at this time, considering those circumstances. One of the members of the Facebook group asks:
I think that will the bad news about the economy and the high oil prices will cause a storm of problems before the Nov 4th election because things will be much worse. Resulting in HSR being viewed too big a project to be passed. Especially if Govnator becomes opposed to it.
This is the most likely worst case senario. Yes?
It IS the worst case scenario, but a plausible one as well. Just last month a Contra Costa Times editorial called high speed rail "more cool than practical" as justification for slashing its funding to close the budget deficit.
This thinking is shared by a significant number of Californians, who have gotten it into their heads that in a severe recession such as the one we are entering, government should pull back, spend less, and do as little as possible to help stoke economic growth. This is straight out of Herbert Hoover, but there are a lot of Californians - even those who consider themselves liberals and Democrats - who fall into this trap.
However, I am confident that we can effectively push back against this kind of thinking. The key is to explain to Californians that 1) the HSR bonds are not going to blow a hole in the state's finances, 2) those bonds will bring back three times their value in leveraged funding and 3) if we don't build HSR, California's economy is toast in the 21st century.
As I noted last week, Arnold does appear to have come around and embraced the high speed rail bond plan. It is likely to have his support this fall. How much that matters will be an open question - unless he changes his tune on education cuts, he is going to have a very low popularity rating come November - but his support is better than his opposition at this point.
The HSR bonds, at $9.95 billion, seem like a large amount of money. And they are. But that investment will bring back rewards many times its value. The federal government is likely to provide between $20 and $30 billion in support for our HSR line, especially if a Democrat takes the White House in November. Private investors are already eyeing the project, and Lehman Brothers believes they can bring around $10 billion in funding. Even if that doesn't materialize, CA's bonds are the necessary "down payment" that will bring other funds to the table and get construction started.
Will that be enough to convince voters to take the plunge? Perhaps not. Too many Californians are stuck in outmoded, obsolete 20th century thinking - that in a recession you should cut back spending. The Golden Gate and Bay Bridges were built during the Depression, to help provide jobs as well as plan for future growth. In my high speed rail is economic stimulus post I explained just how much of a boon the project would be to a state entering a severe recession. Bad economic times, then, are actually an argument FOR this project.
More importantly, our economic future depends upon high speed rail. It's that simple. We need to show Californians that if we do not make this investment now, we are kissing the 21st century goodbye, as our economy will collapse when we can no longer travel easily around the state thanks to peak oil and high oil prices. California's present economy is built on cheap oil. Nearly every aspect of our economic activity, from housing to agriculture to movies to high-tech, depends on cheap oil. And certainly our transportation system, which is currently based on freeways and airplanes.
Peak oil alone suggests the towering need for high speed rail. As oil supplies decline rapidly over the next few decades, we will be screwed without a non-oil based alternative. At the same time, oil prices will continue to rise. And even if they did not, it has been estimated in the CHSRA implementation plan that it will cost $80 billion to expand our freeways and airports to meet the expected travel demand. HSR can meet that demand for half the price and at a tiny fraction of the carbon emissions, and without being dependent on fossil fuels.
In 1960 California voters approved nearly $2 billion in bonds to build the State Water Project, including the California Aqueduct, which made possible the last 50 years of economic growth. Same with the billions of dollars we spent on higher education, freeways, and other infrastructure in the 1960s. We are living off that legacy today, but it is fading fast, and we need new infrastructure, that matches new needs and challenges, if California is to prosper in the 21st century.
High speed rail is the most important project this state has considered in the last 50 years. We cannot reject it just because of a temporary budget crisis that can be relatively easily closed. Our future depends upon the passage of these bonds. That's what Californians are going to have tu understand when they vote this fall.