Check out this graph from the Institute of Policy Studies (original PDF here).
If you look at the left column, government spending on mass transit creates the most jobs on a number basis, and the second highest number of jobs on a total wages basis. Giving people money for personal consumption, as Congress and the President have just done, is basically the worst way.

The thing that they authors didn’t take into account was long-term benefits of the investments, which make domestic consumption and health care look better than they actually ought to. For example, defense spending created the Internet, which has created entire economic sectors, and education spending creates a better educated work force which has downtstream effects on the future generation’s earning prospects. Similarly, what has been the total return-on-investment for New York City’s 100-year-old subways?

Obviously, the other Washington is trying to give a short term “shot-in-the-arm” to economy, so the long term effect wasn’t as important to their decision. However, this does give credence to the idea that, in the long run, mass transit can provide significant economic stimulation. I think it’s worth noting that spending $152 billion for 300 million people averages a little more than $500 per person. Extrapolating that to the nearly two million folks in King County you’d get almost one billion in federal money right there, or $1.8 billion over the entire Sound Transit district.

Food for thought when national politicians start talking about spending for the economic growth. Via Overhead Wire, Via Free Public Transit.

8 Replies to “Want to Boost the Economy, George? Build Transit!”

  1. These social programs for economic growth numbers are weird, but they underestimate military spending because a lot of that goes to science which is a huge boon.

  2. Don’t expect this to be acted on anytime soon, we all know that George W Bush hates transit.

  3. Unfortunately, the Republican infrastructure model we have to live under (practiced by our local Discovery Institute hacks) involves get-rich-quick schemes for contractors (otherwise known as public-private partnerships).

    When you talk about mass transit, the conservative/libertarian approach can be quite disastrous:

    White House likes public-private Las Vegas monorail.

    …The funding would provide much of the $350 million needed to bring the monorail downtown. The rest would come from a government loan and sales of bonds, Regional Transportation Commission General Manager Jacob Snow said.

    Snow also said the project has allies both on Capitol Hill and in the White House. He said the RTC is optimistic that it can get federal funding for more monorail construction. “The (Bush) administration really likes this project because of its public-private nature,” he said. “We’re hearing all the right things from the Federal Transit Administration.”

    With funding and approval of the environmental impact statement, construction on the link to downtown could begin in 2004.

  4. From looking at that chart it looks like spending the money on education would be best, rather than mass transit.

    1. They are both highly important and both represent long term investments in our communities – one is an intellectual investment, the other economic, social and aesthetic as transit improvements typically add to a community’s sense of self and well-being. It is not possible to say which is less or more important, but because education is a mandatory requirement on the States, the shortfalls in education are not likely to be as prominent an issue as the more obvious shortfalls in transit improvements. What I mean to say by this is that our transportation network looks more rundown than our educational fabric. Sure many schools are rundown and many look horrible and underfunded, but these are pockets of underfunding as opposed to the more regional and national crisis that is affecting our transportation network.

      The United States needs to spend way less on defense in the coming years and Congress needs to shift some of the expenditure to other causes and interests.

      Tim

  5. From the chart, education spending creates the most jobs.

    What’s not obvious, is whether it creates the best long-term effect. Of all government spending in the last 100 years, the money spent on research that created the internet was clearly the best-bang-for-the-buck, and that was defense spending.

  6. The report is skewed.

    The military built the first two computer type networks. That isn’t particularly the “Internet”.

    The Internet was created, and provided value by the market place. The technology was kicked off by some of those initial spending points. The real value came from colleges (education) and business (Guv’ment spending doesn’t directly go here at all).

    As for the slam on the conservative/libertarian approach can be quite disastrous…

    First off:

    FACT: Libertarian approach does NOT equal the conservative/Republican approach. Which really doesn’t exist besides – “build roads everywhere”. Which isn’t really an approach.

    FACT: Libertarian approach is often misunderstood simply because people don’t understand US history to save their life. Libertarians want more market choice – which in the end decides MUCH better and more efficiently (just look at the numbers) what people WANT because it is the people who buy what they WANT. It is the Government who screws that up and often skews the numbers by aritifically increasing or decreasing the price competitiveness of a particular industry. One of those industries that has been horribly skewed is any remote market relevance between auto and transit based competition – namely they destroyed it.

    But case in point. When America has a good transportation market (approximately 60+ years ago, truly a free and open transportation market 80+ years ago) – IT WAS BUILT AND OPERATED BY THE PRIVATE INDUSTRY. The industry acheived more in a measly 500-100 years than any society on earthy acheived. Without direct infusions or funding from a Federal or State Government entity.

    We had the Penn Railroad, which electrified the north east corridor and built trains that went 100+ miles per hour in the early days of 1910-1920.

    We had the Great Northern that built an entire transcontinental line connecting Portland, Seattle, to Chicago. All without a penny of Federal grants or money. Without a penny of cost to a single taxpayer.

    Three other lines had been created by private companies, some with land grants (that where worthless until the railroads came, so don’t even go under the myth that these somehow funded the transcon railroads), but mostly by their own funds, land purchases, and “gasp” even trades with the Indians to get land. All without a penny used from the taxpayers.

    The Milwaukee Road offered 120mph service going in and out of Chicago. They offered the largest segment of environmentally sound electrically powered train mileage in the world (900+ miles). All without a penny of taxpayers money.

    Portland Rose Transit, New ORleans Transit, San Francisco Key Transit, Oklahoma Transit, Jacksonville FL Transit, and dozens of others operated streetcars with or without mixed funding from privately operated utilities, most operating at PROFIT while maintaining very low prices and not using a single penny of taxpayer money. Sometimes, yes “sometimes”, cities funded a few parts of exhorbitantly expensive investments such as bridges. Often though even these where paid back via “loans”.

    So seriously, don’t even perpetuate the lie that Government subsidized and expanded transit is the be all end all. Privately operated, maintained, and profitable transit did more than any of these pathetic public entities that require continual influxes of funds from the public tax coffers, usually stealing from other modes or other sources. Don’t even think for an instant that we’re replacing or getting back service we had. What we’re gettin is a mockery of what we Americans once had at no cost except for usage. Now we ALL pay, usually at higher percentages and total cost – in MASSIVE ways, if we use the system or not.

    Especially the “free” aspects or roads and transit – as is said, “free is the most expensive way to get anything”.

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