End of the Lines

b71.jpgThe B71 made its last run Saturday night. Photo: Aaron Naparstek

Today, for the first time, New Yorkers braved the morning rush using our new, diminished transit system. With more than a dozen bus lines discontinued over the weekend, dozens more running less frequently, and subway service changes forcing straphangers to cope with longer rides and more crowded platforms, no one expects an orderly transition.

The initial shock will subside, eventually, after which we’ll settle into the unpleasant truth that living without a car in New York City is harder now. For some people, that will mean longer commutes and less time with their families. Others will drive instead of taking transit. Or opt for commuter vans. Or, if they feel safe enough, ride their bikes. Some people just won’t leave their homes as much.

Ask a hundred New Yorkers why this is happening, and I would estimate, conservatively, that eighty or ninety of them will direct their anger toward the agency that’s implementing the cuts — the MTA. And sure, the MTA isn’t blameless. These austerity measures could have been put off, for the time being, using a one-shot infusion of federal stimulus cash. Does that make the MTA the right target for New Yorkers’ frustration? Not at all.

These cuts are quite plainly the result of political decisions made by our elected officials. The Daily News editorial page nailed it today: If lawmakers in Albany hadn’t swiped $143 million in dedicated transit tax revenues from the MTA, the $93 million in savings from service cuts would not be necessary. That theft was only the latest in a long line of decisions to deprive bus and subway riders of an adequately funded transit system.

If the State Senate hadn’t blocked bridge tolls in 2009, these service cuts could have been prevented. If Sheldon Silver’s Assembly hadn’t killed congestion pricing the year before that, these cuts could have been prevented. If the state and city had maintained support for student transit service at historical levels, these cuts could have been prevented. If the state and city hadn’t gutted funding for the MTA capital program in the 1990s, setting the clock ticking on the MTA debt bomb, these cuts could have been prevented.

Even in 2010, the cuts could have been avoided. Congestion pricing or bridge tolls are not a panacea for all the problems plaguing the transit system and its finances, but they could have raised sufficient funds to avert the current day of reckoning, and probably a few more that are already visible on the horizon.

The fact that Albany deemed road pricing too toxic to even consider in an election year speaks volumes about the political calculus at work. Saddling New York City’s car-free majority with the worst transit cuts since the mayoralty of Abe Beame: That’s an acceptable electoral risk. Asking a small minority of relatively privileged car commuters to help pay for the transit system that saves NYC streets from unrelenting gridlock: That’s unthinkable to our elected leadership.

Unless New York City representatives are forced to re-evaluate the political risk of allowing transit service to deteriorate, today’s cuts probably won’t be the last.

  • Larry Littlefield

    “Unless New York City representatives are forced to re-evaluate the political risk of allowing transit service to deteriorate, today’s cuts probably won’t be the last.”

    They almost certainly won’t be the last.

    What the MTA is doing today is eliminating some overly costly services, and making the kind of cuts that might be required given shared sacrifice in a deep recession. While inconvenient to some, the consequences will not be catastrophic.

    What will probably become catastrophic is the ability to provide service as more and more money is diverted to the retired, at the MTA and elsewhere, and the ability to maintain or improve the transit system due to pay funding of ongoing normal replacement — and current funding of generally acknowledged operationg costs — through massive debt.

    The MTA capital plan dies in six months, and most of it consists not of improvements we’d like to have — the are a one-time cost — but maintenance to preserve what we’ve got. It could probably be funded with cash, if all the cash weren’t going to past debts with some of it siphoned off for other agencies.

    As for a federal bailout, it appears the federal government is going to cut off the long term unemployed from benefits — even though employers have been paying what is allegedly a “dedicated tax” for federal unemployment benefits for decades. That’s because the federal government is broke, as are states and localities. So what are the odds of a big boost for transit?

  • Bolwerk

    Clearly the obvious problem here is lack of concern for losing their seats. Republikans and Demokrats, whether Sheldon Silver or Dean Skelkos (I’m not even sure what Pedro Espada is this week), clamor to pander to car-dependent, narcissistic suburbanites while the needs of the city simply get ignored.

  • Larry Littlefield

    The biggest problem is that the sold out future is here. They’re still selling, but no longer so special interest can get more, but merely to forestall the extent to which everyone is going to get less. And they aren’t selling to benefit transportation, not roads or transit.

  • The Feds are most definitely not broke. They’re paying low interest rates on the debt, which means the bondholders don’t care too much about high deficits during a depression. However, the Feds are definitely plagued by some pundits who think the government is broke and needs an austerity program. It’s 100% perception, 0% reality.

  • Larry Littlefield

    No they are broke. The bondholders assume that theirs is a contractual obligation, whereas Social Security and Medicare are not, and these can simply be taken away from younger generations plunging them into poverty and ill health in old age, and yet those younger generations can be forced to pay taxes. We’ll see.

  • Larry, have you read Paul Krugman? He’s convinced me that the Feds, at least, can safely borrow now while interest rates are low, in order to stimulate the economy; they can pay it back later during the recovery. According to Krugman, that’s the only way to avoid a lost decade.

    I’m not sure if Krugman’s theory applies equally to the states.

  • Larry Littlefield

    Yes I’ve read Krugman Sure they can borrow now, but Krugman is assuming younger generations will be much richer later when they have to pay it back. That isn’t true. Japan borrowed massively and has still faced a lost 20 years, and is poorer. It’s backed in with this much debt.


    That is the only chart that matters.

    A more cogent Krugman article admitted that perhaps we need massive inflation as a back door default on fixed debts. He mentioned 4 percent per year. I think 10 percent plus for a while is more like it.

  • Larry Littlefield

    Ahh, the link doesn’t work.

    Go here and reset the first year of the chart to 1950 or earlier.


    Yes, we can’t shut of the debt now. But the upshot is that to get a few more years of consumer spending in excess of earnings, the federal government will be spending vastly more on interest and less on other things permanently.

  • I think you’re missing Krugman’s point, which is that the younger generations will be much richer if the government stimulates the economy now. He argues that Japan’s lost decade was due precisely to the fact that they didn’t have enough stimulus.

    And in response to your chart, Krugman has this one.

  • Larry Littlefield

    Is that total debt or government debt? We’re at 300 in total.

    I’m not sure what you are arguing for. Should the MTA abandon congestion pricing, roll back the fare, and just keep borrowing, using more borrowing to pay the interest, and just keep doing that? Should the federal government not allow the Bush tax cuts to expire, but add more instead?

  • Larry Littlefield

    And what do you mean when interest rates are low? The Federal Reserve is keeping rates low by buying up U.S. Treasuries. Should it just do so indefinately, and in increasingly large amounts?

    A soaring share of the debt is short term. Which means it rolls over every 13 weeks. Should we keep borrowing more and more while interest rates are low, not matter how high the debts go, and then actually pay that money back when interest rates on the EXISTING debt soars, even if the cost is 50 percent of the federal budget or more?

  • What I’m arguing is that we could borrow more, but only if the money goes to stimulus activities – job creation, essentially. That means that any tax cuts have to go to the poor and lower middle class, because they will spend it immediately.

    If it just goes to pay back other debts, or gets squirreled away in retirement accounts that won’t be spent for years, then the economy won’t recover, tax revenues won’t increase, and the government won’t be able to pay off the debt.

    Sadly, I can’t be confident that any money borrowed will be used to create jobs. All I can say is that government borrowing is not always a bad thing.

  • Larry Littlefield

    One thing that has changed is not only the amount of debt but what it was used for. The money was just blown, with no future benefits to offset the future debt burden.

    Firms and people used to borrow for assets that would earn money (plant and equipment, land and resources, a college degree priced at a cost that could be earned back with higher productivity) or save money (buying a home so you don’t have to pay rent, buying a washing machine so you don’t have to go to the coin laundry).

    More recently, firms have borrowed for executive bonuses (stock buybacks to cover over the dilution of stock options), and people have borrowed for huge or overpriced houses in excess of their rent savings, big SUVs in excess of their transportation needs, vacations, etc. Some have borrowed for ordinary spending, to paper over an increasingly unequal distribution of income.

    When this collapsed on the private side, the public sector stepped in and borrowed to keep the consumption going, at least to an extent. Now that appears unsustainable, and as for the reaction, just look at the stock market today. I’m not sure I see a way out.

    I’ve tried to do what might work — spending money in a way that will save money later by installing solar panels, replacing consumer durables with more energy efficient models — and will be shipping off years of savings to colleges. Since everyone knows people can’t and won’t pay what they borrowed, I’m not sure that works for those who would need to to invest, even if investing is what they would do with it, which I doubt.

  • Larry, what do you mean “The stock market today”? The stock market has been fluctuating over the past few months based on the state of the economy. Good economic news led to gains in the spring, but now bad news lead to declines. It’s not about debt; it’s about growth.

    Financial crises happen regardless of debt levels. Japan had a high savings rate in 1990, and South Korea had a very high savings rate in 1997. France has maintained a national savings rate of more than 10% over the past few years, but it never led to growth or low unemployment. Germany did little better, and now is busy foisting a recession on all of New Europe with its calls for austerity.

    What the stimulus did was employ people. It doesn’t matter whether it’s for consumption or investment. In fact the CBO’s highest multiplier scores were for extending unemployment benefits and giving aid to states to prevent the service cuts we’re currently seeing; infrastructure spending scored somewhat lower, because it takes too long. (Tax cuts did even worse.)

  • Larry Littlefield

    Austerity when it shouldn’t happen, because you are tapped out and insolvent, is the flip side of going deeper and deeper into debt when the economy is strong, because they losers won’t complain about what the insiders are doing as long as they don’t have to pay for it (yet). That’s the problem — the position we were in going into this recession.

  • You’re right that the US was in a bad position coming into the recession, because of past borrowing. However, the recession is so deep that even with massive new borrowing, the interest rate to be paid in the future is low. It might create problems once the economy is in strong growth mode again and investors demand higher interest payments, but then the US would be in a position to implement fiscal austerity, unlike today. The most important thing right now is to ensure the economy is back in growth. Let the tax hikes and spending cuts come once that is done.


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