Nov 29, 2008
As did John McCain, we confess to a lack of perfect understanding of the “dismal science” of economics. We are more or less at one with Mr. Micawber, who summed up all fiscal wisdom thus: “Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”¹

Though economists pretend to more complications in their calling than this, it all comes down to the same thing: Live within your means or pay the consequences. Thus far, many domestic enterprises which have failed to live within their means, which concocted exotic and opaque financial instruments and bought them with—horrors!—borrowed money, have failed to pay any consequences; however, we Micawber types know those consequences are coming, don’t we?

As we say, the ins and outs of the dismal science are a closed book to us. With a ten trillion dollar national debt, four trillions of which were added by Bush in the largest increase under any U.S. president,² we suspect much misery lies in wait just over the horizon.

For 32 metropolitan transit agencies, that horizon is now. In a deal too complicated to describe here, but which is admirably explicated in the Tax Foundation’s Fiscal Fact No. 153, Transit Agencies in Bind Due to SILO Deals and AIG Collapse, those agencies—very likely including your bus and subway provider—may be in for many billions in contract termination fees demanded by foreign banks. The perfect storm of economic collapse has rippled across the landscape, with a great deal more damage impending than we are advised of on the nightly news.

The transit agencies have now gone to Congress looking for—what else?—their own bailout.³ They are going to have to stand at the end of a long and very unruly line.
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¹ David Copperfield, chapter 12, by Charles Dickens (Accessed November 25, 2008)
² Bush Administration Adds $4 Trillion to National Debt, by Mark Knoller, from CBS News, September 29, 2008 (Accessed November 25, 2008)
³ Transit Agencies on Capitol Hill to Lobby for Bailout, from Tax Foundation, November 19, 2008 (Accessed November 25, 2008)
tags: Transportation | Economics