Thursday, October 07, 2010

Transit Nerdery

As Krugman says, even if roads did pay for themselves through gas and other fees (they don't, not even close), there's still a basic economic argument for subsidizing mass transit, because it ameliorates congestion. From an economic standpoint, there's "too much" congestion because congestion is an externality. You can reduce it by adding a toll, or by making an alternative route more attractive by subsidizing it.