Krugman's Tunnel Vision

http://www.futureofcapitalism.com/2010/10/krugman-tunnel-vision

From Paul Krugman's New York Times column today bemoaning Governor Christie's decision to cancel a rail tunnel under the Hudson: "Of the $8.7 billion in planned funding, less than a third was to come from the State of New Jersey; the rest would come, in roughly equal amounts, from the independent Port Authority of New York and New Jersey and from the federal government. Even if costs were to rise substantially, as they often do on big projects, it was a very good deal for the state."

The Port Authority is hardly "independent." Its chairman and half of its board members are appointed by the governor of New Jersey, and it is funded in part by bridge and tunnel tolls paid by New Jersey drivers. Mr. Krugman makes it sound like the Port Authority's share of the funding for this project is just going to materialize out of thin air at no cost to anyone. Same with the federal government's share. New Jersey residents pay federal taxes, so part of the federal share of the project's costs would come out of their pockets, too.

by Ira Stoll  |  Oct 8, 2010 at 10:37 am Related Topics:  Paul Krugman, Press, Stimulus, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list