The Cato Institute’s Randal O’Toole gets under the skin of many of those interested in building a more rational and green metropolitan geography, but in many ways he’s an ideal opponent. It would be difficult to concoct more transparently foolish arguments than his. The man is an engine of self-parody.
The requisite identification of “libertarian” contradictions:
This is one thing I’ve never understood about the libertarian love affair with highways; they seem utterly blind to the fact that it has required and continues to require massive government action to build and maintain the road network. The interstate highway system is perhaps the single largest government intervention in the economy in the 20th century. Reading O’Toole you’d think it was a wonder of the free market.
And with ease, Ryan points out the data needed to take O’Toole to task on his persistent assertion the “roads pay for themselves”:
The source of his blindness on the issue seems to be due to his belief that roads pay for themselves, and that congestion exists only because governments shift gas tax revenue to pay for transit and other smart growth projects. Nothing could be farther from the truth.
In the first place, gas tax revenue comes nowhere near paying for roads. Federal gasoline tax revenues cover barely half of the annual budget of the Federal Highway Administration. Add in diesel tax revenues and you’re still short. And that’s just the federal budget picture.
In response, Randal replies to critics in the comments of his latest post of his “Antiplanner” blog:
The Antiplanner sees the American dream as freedom of lifestyle choices and opportunities to realize those choices unfettered by government subsidies or restrictions.
As for the claim in D4P’s link that the Antiplanner ignores highway subsidies, I’ve addressed that many times in this blog. Yes, there are highway subsidies, but they are tiny compared to transit subsidies. I oppose all subsidies. Will D4P agree with me that we should get rid of all subsidies and then let people make their own choices?
Great! So, this is the standard by which the “anti”planner wishes to be judged? Very well – From now on, this shall be the standard I shall point out his hypocrisies.
The rhetoric of his first statement is noble, but I don’t think Randal read Avent’s post, or simply evades the arguments. I’d like to see him rebut Avents arguments directly, as opposed to brushing them aside. To assert that transit subsidies outweigh highway subsidies may be true when only considering the proportion of public vs private funding, but is absolutely absurd when compared on a national scale, especially over the past 70 years. I’m more than willing to grant to him that transit is significantly over-subsidized, but the vast subsidies to highways over the years have empowered planners to shape the landscape irreversibly away from what one would expect when “unfettered by government subsidies”.
Nonetheless, O’Toole and Avent both understate the scale of highway subsidization when looking at explicit costs (or accounting costs) and neglecting opportunity costs. First, highways take up a vast amount of real estate, which can no longer be used productively. Second, publicly-run transportation enjoys tax-free status, saving agencies on property taxes, sales taxes, taxes on revenue generated, and other significant expenses. At the same time, accounting costs neglect the opportunity cost of capital diverted from private investment for public projects, Capital projects should earn a return sufficient to “pay for itself” plus a profit for the capital put at risk, but funding for public projects usually come from low-interest, tax-exempt bonds. I didn’t even mention parking mandates and subsidies, cost of policing and a vast array of externalities.
Thus, when considering opportunity costs under any accounting comparison, all transportation is clearly subsidized at an amount that is absolutely unsustainable by private (“unfettered by government” interventions) means. For the intellectually corrupt “anti”planner to consider highway subsidies “tiny” is a completely absurd disregard for the rational examination of reality.
For more, read, Urban[ism] Legend: Gas Taxes and Fees Cover All Costs of Road Use.
or some of O’Toole’s rare attempts at analyzing gas taxes and highway subsidies: