This is scary.  The Cato Institute is well-known for its support of small-government conservatism, but you can’t supplant fact and logic for political ideology.  You also shouldn’t pick and choose your favorite parts of economic theory to explain your position.  I’d like to bite this into small pieces and provide the counterpoint so missing in this narrow interpretation of transportation policy.  Read the full report here, we’ll start with these two paragraphs:

Much of the debate over the next reauthorization is between two conflicting views of transportation. One holds that auto driving is bad and that the goal of federal transportation policy should be to reduce per capita driving both by creating disincentives to driving (such as more congestion) and by spending highway user fees on alternatives to driving (such as rail transit and bike paths). This is the view of Secretary of Transportation Ray LaHood, who admits that Obama administration policies are designed to “coerce people out of their cars.”
The other view is that mobility is valuable, and that the goal of federal and state transportation policies should be to enable the kinds of mobility that people will support through user fees while cost-effectively reducing the environmental impacts of that mobility.  As opposed to the top-down planning of the previous view, this view could be called customer-driven transportation.
-Randall O’Toole, The Cato Institute; The Citizen’s Guide to Transportation Reauthorization


We don’t need to drive less.

We do need to drive less.  I’m not saying we need to stop driving, there are times when I really appreciate being able to throw my skis on the roof of my car and head out to Pine Knob or Mount Holly for some skiing after work, but for the everyday trips – the back and forth to work – we should consider other options.  My work commute shouldn’t be subject to the vicissitudes of international trade.  The gamble we take by relying so heavily on fossil fuels for our economy to function is going to com back to bite us.

Highways are not subsidized.

You say user-fee, I say subsidy.  Tomato, Toma(h)to.  Taxpayers pay much more on roads for each unit of benefit than they normally would anywhere else as consumers.   In my opinion, a user fee becomes a subsidy when it passes the threshold where the marginal cost for your use begins to outweigh your marginal benefit, and when part of your user fee goes to areas that you gain no benefit from.  In English – a user fee becomes a subsidy when the government decides it wants to spend much more of your money than they needed to for you to have the same benefit, and can do so because they are allowed to tax you.  We got to that point long ago on highway investment, but because we could keep raising taxes instead of cutting back, we just kept building.

To say that all transit funding is a subsidy is again incorrect.  We all gain direct and indirect benefits from good transit service.  I’m not talking about the sad state of transit today, I’m talking about an optimum level of transit and highway investment leading to an optimum degree of benefit for users of all modes.

If we’re going to call transit funding a subsidy, let’s start calling a spade a spade and get rid of this notion of user fees paying for the use of that stretch of road.

Customer-Driven Transportation.

We are forgetting a few key factors here.  A free market is truly free when it is free of intervention or regulation by the government, when decisions are based on perfect information, when there are no significant barriers to entry or exit, and when the market is competitive.  Nothing about our transportation system is Free Market.

Customer-Driven Transportation implies that customers (i.e., drivers) are demanding the road they are on, the car they are in, and the gas they are driving.  I would agree with that – they need all of those things in order to get from A to B… but there’s the key issue.

When you are hungry, do you think first about gathering a cardboard box, a spoon, and a plastic jug, or do you think more about getting yourself a bowl of cereal?  Why do we think we demand the car, the road, and the gasoline when we really demand a trip from A to B?  Why do we not think of the end-game when we are talking about transportation?

If something gets you quicker, cheaper, and safer from A to B, why aren’t you demanding it?  I’ll take a stab at the answer: It’s because the government built you a highway, you don’t know about any alternatives, crowd-out displaced most other alternatives, and because the government didn’t build you an alternative.

Cars = Freedom.

What is the purpose of a transportation system?  Trans-port [v] – to carry, move, or convey from one place to another.  So our purpose is to move people and goods.  Because we live in a world of limited time and resources, we should find a way to move our persons and services in the quickest, most efficient way possible.  It’s funny how simplifying an argument makes it sound scary: Driving is not BAD, the issue is how MUCH driving we are doing.  Vehicle-Miles Traveled growth outpaced population growth by over 300% in the 1990s, and will continue to do so out to 2030 unless we do something about it.

Road construction can cost-effectively mitigate environmental impacts.

Here’s a real winner.  What has more effect on curbing greenhouse gas emissions: an intersection treatment or a full hybrid bus?  Again, I’m not talking about inefficient transit, I’m talking about good roads and good transit.  Let’s play this scenario out:

Vehicles/Day Riders/Vehicle Riders Bus 176 x 35.5 = 6248 Car 28,000 x 1.15 = 32200 MPG Trip Length Fuel Used Riders/Gallon Bus 4 / 1 Mile x 44 = 142 Car 15 / 1 Mile x 1866 = 17.25

A 10% improvement for gas mileage on a car (or doubling, for that matter) doesn’t even come close to the efficiency of using transit.  We’re not going to get into the other variables like the better air filters and cleaner fuel burns that come from buses.  This back-of-the-napkin calculation shows what we all know – that transit produces less negative impact on the environment per person because it uses less fuel per person.

Not to mention it requires less imported fuels from maniacs like Chavez and Ahmedinejad…

I’ll continue taking bites off this one as I get time… Until then, I need some dinner.