Someday I'd like to know the truth. I usually agree with Paul Krugman since he IS an Economist, studies the problem in depth and IS a professor who teaches this stuff. Also, most other economists agree with him. His perspective makes a lot of sense to me; stimulate in times of recession to boost the economy, and save through budget constraints in times of growth and excess. In fact, that little truism is repeated over and over in those Proverbs, written and unwritten, passed down to us through history. But, sometimes I wonder. Take his Op-Ed about the cancellation of a new rail tunnel from New Jersey to Manhattan, Op-Ed Columnist - The End of the Tunnel - NYTimes.com. New Jersey's Governor Christie, a rising star of the Republican Party, cancelled the project because of price overruns.
I totally agree with Krugman that it was really STUPID and shortsighted to cancel the project, whether it had a price overrun or not. An investment like this adds billions of dollars every day to the economy of New York, New Jersey and America. In other words, New Jersey, New York and the U.S. WILL BE PAID BACK. I know that's hard to see if, like me, you don't live in New York or New Jersey. But, it is projects like this that actually lower our taxes, and that's because it increases the revenue to local and federal governments - much more revenue than than those counterintuitive tax cuts do. This is a big deal.
What I don't know the truth about is whether Governor Christie is being an obstructionist, or whether he's just had enough of price overruns. This Washington Post article actually has me sympathizing with him. What started as a $5 billion cost to New Jersey, that will pay one-third of the total cost, in 2005 has now grown to $10 to $14 billion. If he's simply had enough of price overruns, then I can't disagree with him. I've had enough of that too. What's with price overruns, anyway? It happens EVERYWHERE.
There is another project in progress that is also a big deal, even to people who don't live here. That project is the Bay Bridge retrofit/replacement now under construction, and yes, you guessed it. It, too, is running way over the original budget. In fact, almost three times the original budget. The Eastern Span, the part that will be replaced and that was originally estimated at $2.5 billion, is 15 months behind schedule and now estimated to cost $6 billion! So, not only can the contractors complete the thing on time, they can't complete it at a reasonable cost.
Then there is the Chinese steel we're using on the Bay Bridge project that, according to reports, is causing most of the delay. It is delivered late, and when it does arrive we find that it is below specifications and we can't use it. The Yuan, too, is changing the price of the steel. China is now "floating" its currency, which it manipulates to its own advantage of course, so that the price of some things are rising, especially contracted material, while pricing other materials to undercut ours. It's a dog-eat-dog world, and we're not winning.
I'm always suspicious of cost overruns in low-bid contract bidding. If I were a corrupt contractor dealing with a government, I would submit a low bid just to get the job, then run the prices up to cover actual costs. Politicians hardly ever know what they're doing in contracting anyway, and they can always be corrupted with favors and money as well. I doubt that it will ever end.
I'm glad that we, here in California, are continuing the Bay Bridge project in spite of the overruns because we will be paid back. Governor Schwarzenegger is doing a good job in spite of all of the crap and Sarah Palin, etal., criticism he has to put up with. The tolls went up from $4.00 to $6.00 to help pay for the overrun, which ironically drove drivers away from the bridges and increased riders on the Bay Area Transit System, that is also in debt, to the point that it, too, may make a profit. Go figure. I guess when we stop competing with ourselves, we may get at least one thing right! But, it's not over yet, so we'll see. There is, after all, the Meg and Jerry show to watch in November. Does anyone seriously think Meg Whitman will do better than Governor Christie, whatever his true reason?
I guess the real truth is that nowadays we don't know what the hell we're doing, and if we do get something right, it is entirely accidental. And, if that's the case, perhaps we should THINK before we vote. We should REALLY learn who and what we're voting for, and whether they or it REALLY IS GOOD FOR US, before we vote. While I sympathize with Governor Christie, I don't agree with his cancellation approach. There were other alternatives. But, I feel like a one-legged man in an ass kicking contest, or just one more of the herd milling around smartly; impotent. I guess if the Tea Party takes over, we'll soon be in a stampede - over the cliff. I don't see them thinking, in which case, milling around is better than a stampede.