As soon as Congress passed the $700 billion bailout, California's Governor Arnold Schwarzenegger sent a letter to Treasury Secretary Henry M. Paulson, Jr. asking for a $7 billion loan to make up for the enormous gap between the California budget and projected revenues. The Governor has since withdrawn the request but he nevertheless is supporting a proposition on the November ballot which would have California go further in debt, to the tune of $9.9 billion dollars, to build a high-speed rail system between Los Angeles and San Francisco.
I am correctly seen as a proponent of rail transportation. I must wonder if now is the time to build this "bullet" type train, given the State's dreadful fiscal situation. Shikha Dalmia, a Senior Fellow at the libertarian Reason Foundation, quoted the Governor as telling an audience at the Commonwealth Club of California that "...just because we have a problem with the budget does not mean people should vote 'no' on high speed rail." This from a Governor who said he intended to veto the bill which would place the issue before the people. He was against it before he was for it.
Proponents of high-speed rail claim it would create 450,000 new jobs. I have no idea as to the source of that figure but high-speed rail projects in Japan, France, Germany and Sweden have not created nearly that number of new jobs. Perhaps the proponents' claim that high-speed rail would reduce greenhouse gases would prove correct but the claim that it would reduce traffic congestion is somewhat dubious.
Dalmia points out that the State's general-obligation debt has tripled in the past six years. Without no new debt California would spend 6.1% of its budget merely to service the debt. The deficit keeps on growing to the point that the Governor wrote that remarkable letter to Paulson.