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A Novel Idea: Pay-as-You-Go Government

New Jersey Governor Chris Christie is still acting as if he means what he says about controlling the costs of government. By canceling the long-planned construction of a second commuter tunnel under the Hudson River today, Christie has reaffirmed the principle that government should not try to do more than it can afford. A close look at the finances of the scheme showed that cost overruns were likely to send the bill on the project to as much as $14 billion, almost $6 billion more than the original estimate. That means that New Jersey — which is to say, New Jersey’s taxpayers — would have to pay at least $8 billion of that amount, the remainder being contributed by New York’s Port Authority and the federal government. But in the absence of givebacks by the state’s civil-service unions, whose contracts and pensions threaten to send the state into the red even if the tunnel were not to be paid for, Christie said no, to the utter consternation of the unions, the rest of the political class, and New York Times‘s columnist Paul Krugman.

Other politicians (like Christie’s predecessor Jon Corzine, who authorized ground breaking on the project without thinking about the costs to the taxpayers) are shocked by Christie’s chutzpah. The idea that government should only undertake those projects it can pay for without having to further bilk the taxpayers is considered a shocking concept.

Krugman, the Times editorial page, the unions, and many of the politicians who have worked for this project all think the mere fact that the tunnel is needed justifies any amount of debt to build it. They also seem to think that worrying about where the extra $6 billion will come from is just silly.

They are right in that a new tunnel is desperately needed. New Jersey Transit is currently forced to share one Hudson River tunnel that is owned by Amtrak. The result is massive congestion and delays that will only get worse in the years to come. Even worse, since Amtrak owns the tunnel, to the injury of those commuters who take NJ Transit, the worst commuter line in the region (in terms of its on-time record), is added the insult of often having to wait for long periods while Amtrak trains breeze through — Amtrak always getting priority from the dispatchers. This means that there is a large (and generally ill-tempered) constituency of commuters who would like to see the tunnel built. Among them is Krugman, who confessed on his blog that: “And yes, if anyone should mention it, I am a resident of New Jersey who often visits Manhattan, and therefore has a personal stake in this project. You got a problem with that?”

As it happens, I, too, am a daily NJ Transit commuter into New York. But as much as the prospect of a better train ride in the distant future appeals to me, I’d bet that the majority of disgruntled and delayed passengers would prefer not to have their taxes raised. Nor would they like Krugman’s suggestion that Christie radically raise gasoline taxes to pay for the cost overruns, since almost all of them drive their cars to the train stations from which they start and end their daily trek to work. Voters are sick and tired of tax-and-spend politicians who think nothing about the long-term consequences of their largesse, so long as someone else is paying for it.

Christie will probably take a lot of flak for his decision, perhaps even more than the criticism he took for his confrontation with the state’s teacher unions. But the bet here is that the majority of the people of New Jersey — including many of those unhappy souls who are forced to take NJ Transit — prefer to have a governor who doesn’t think he has a right to pick their pockets in order to play the hero by championing expensive projects. In case Krugman forgot, that’s the reason Christie was elected last year and why so many other fiscal conservatives will rout free-spending liberals in the congressional elections this fall. And whether or not Krugman has a problem with that, it’s what we Americans call democracy.



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