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Post 120

Monday, November 24, 2008 - 10:34amSanction this postReply
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Greetings.

Part 31 of my response to Mr. Jetton is available here:
http://progressofliberty.today.com/2008/11/24/response-to-jetton-31/

Part 32, the final part of my response, will be available tomorrow.

Sincerely,
G. Stolyarov II



Post 121

Tuesday, November 25, 2008 - 7:24amSanction this postReply
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In Part 31 on his blog Mr. Stolyarov responds on costs to road users under the current system versus a private system. I believe we both made some comparisons that could have been clearer. In post 116 I pointed to two different claims he made which looked inconsistent. He holds them instead to be consistent and summarizes his position. I agree his three points in Part 31 are consistent, but will comment on his 2nd point, as follows:
2. There will be more private toll roads than government toll roads today, so aggregate tolls will likely be higher under a private system.
My alternative would be that aggregate tolls would be much higher under a private system with near certainty. Tolls now provide less than 5% of aggregate revenues. See post 110. Something has to make up for a loss of 95% of revenues from taxes. It may be a smaller additional amount needed from tolls or other sources (e.g. rents for space at oases) than the tax revenues now provide, but getting by with less than 5%, or even a few of multiples of 5%, of the current level of revenues is in my opinion a pipe dream.

Onto Part 32. He writes:
Regarding my argument that private road entrepreneurs would be more likely to make roads initially sufficiently wide so that future inconvenient widenings would not be required as often, Mr. Jetton writes: “Why will a private road builder buy unneeded right-of-way for road X which will begin to generate revenues decades in the future, when the same money could be used on road Y that will generate revenues immediately?”

To this, I respond that the costs of building an entirely new road elsewhere might be much higher than the costs of building the initial road with more lanes, especially considering that significantly larger amounts of land would need to be obtained for the new road. Certainly, it is possible that the road entrepreneur could choose to build two smaller roads instead of one larger one,
My question was not an implicit claim that a private road owner would never buy right-of-way beyond immediate needs, but that it's very improbable. The question was also an implicit appeal to the law of diminishing returns (see post 96), simply applied. The particulars would be important, and the alternatives probably not restricted to two. To make the question more complete, change "road Y" to "road Y or some other use". The latter broadens the alternatives and would even include earning interest on the money for a while until a better alternative becomes available. 
Finally, I would like to address Mr. Jetton’s words that “[i]t seems [Mr. Stolyarov] gave up on the idea of retractable rollers. Instead he throws out some new ideas about remote-controlled or robotic barriers.” I would like to clarify that this is in fact the same idea. The barriers would have retractable rollers which could be deployed remotely and moved to the location of one’s choice – or else could move themselves. This is not too improbable given even today’s technology. I own a cleaning robot which is extremely effective at accomplishing its intended tasks and which can move in much wider variety of ways than the kinds of devices I am envisioning here.
It seems my points about retractable rollers didn't register with him. I can't access his imagination, but do regard retractable rollers as utterly impractical for the kinds of barriers now used, and have said why for cones, light barrels, and concrete ones.

In parts 29 and 30 Mr. Stolyarov wrote about truck-only roads or lanes. This is not an original idea -- separate truck lanes already exist on a 30 mile segment of the New Jersey Turnpike. There is an article about truck-only lanes here.  Robert Poole, of the Reason Foundation and whom I mentioned in post 100, is cited in the article a few times.  Also, a web-page of the Reason Public Policy Institute -- affiliated with the Reason Foundation and Reason magazine -- says here:  "Truck-only toll lanes are the brainchild of Robert Poole, an engineer who oversees transportation studies at the Reason Foundation, a libertarian think tank in Los Angeles."

(Edited by Merlin Jetton on 11/25, 1:22pm)




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Post 122

Tuesday, November 25, 2008 - 1:39pmSanction this postReply
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I am thinking we need to take a step back and suggest "How to privatize the banking system" at this point.



Post 123

Tuesday, November 25, 2008 - 2:15pmSanction this postReply
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I am thinking we need to take a step back and suggest "How to privatize the banking system" at this point.
Touché.




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Post 124

Wednesday, December 10, 2008 - 11:46amSanction this postReply
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WSJ op-ed by Robert Poole




Post 125

Monday, December 15, 2008 - 7:16amSanction this postReply
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Mr. Jetton,


Thank you for linking to this excellent and thought-provoking article by Robert Poole. I wrote a post regarding the article and published it today on The Progress of Liberty:

 

http://progressofliberty.today.com/2008/12/15/robert-poole-mismanagement/

 

I think this piece does a wonderful job at addressing some of the issues that arose in our earlier discussion. I would be interested in your thoughts.


Sincerely,

G. Stolyarov II




Post 126

Monday, December 15, 2008 - 1:01pmSanction this postReply
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Mr. Stolyarov wonders what sort of impact his blog entry had on my thinking on the subject. Overall, very little.

I was surprised by Secretary of Transportation Mary Peters saying there is $400 billion or more available in the private sector for infrastructure investment. So I searched for more info about it and found this article. Notes: Copying the article to an application such as Word or Notepad will make it much easier to read. You won't have to scroll left-right. Also, it was written in March, so the amount of bank financing available has very likely shrunk.

Like the article says, the $400 billion or so is not all for roads and bridges, it is not all destined for the U.S.A., and only $100-$150 billion of it is for equity capital. In other words, the last phrase means the investors seek bonds, and not ownership. So I wonder if the owners of any of this capital have in mind the ownership of roads. I'm confident that pension funds and insurance companies don't. Like the article says, they seek stable, long-term income-oriented investments for funding pension or annuity payouts.

Mr. Stolyarov can correct me if necessary, but it seems the kind of privatization he advocates, for the most part anyway, is the private ownership of roads. I hereby coin "semi-privatization" to mean private financing with government retaining ownership.

I believe more semi-privatization of roads would be an improvement -- at least if the result is more toll roads, truck-only lanes, and other ways of reducing congestion. My reservation is that governments would use cash infusions from semi-privatization as an excuse to maintain or increase spending on other things, like I said earlier in posts 34 and 94.

Lastly, I take this opportunity to add another reason, which I didn't think of earlier, for the government in the 1950's failing to anticipate the extent of the increase in traffic (referring to post 119, 2nd paragraph). After the planning of the interstate highway system, there was a far greater than expected shift from trains to trucks for shipping freight.





Post 127

Saturday, October 1 - 10:17pmSanction this postReply
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Here is one argument against road privatization:

"As a public good, roads have very, very low supply. This is because a "public road" gets no profits, so that nobody would build a public road. On the other hand, a private road- a toll road- that charges money for usage, has extremely low demand because nobody would pay (consciously) for using a road.
Also, imagine the waste of "road builders" building two roads to get to the same place. A paved road is a paved road is a paved road. So, its a waste to build several dozen roads between point and a point b if the maximum strain put on the road requires only 3 people. The fact is the price of a road would quickly go towards 0, at which point nobody would want to build a road. Indeed, at this point, the only way that roads would get built at all is if road builders came together in a cartel.We give this cartel on road building a name: the Department of Transportation, and the Constitution."




Post 128

Sunday, October 2 - 4:52amSanction this postReply
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Here is one argument against road privatization: ...
There is a grain of truth in what you say but it is way overstated. There are private roads now. See here. Also, "public roads" don't have to be government-owned.




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