Communist central planner Joe Biden opens his mouth and inserts his red boot.
NY Daily News reports:
“Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive,” he said. “In the middle of the Civil War you had a guy named Lincoln paying people $16,000 for every 40 miles of track they laid across the continental United States. … No private enterprise would have done that for another 35 years.”
It’s funny that he mentions the railroads.
Rothbard has dissected the funding of the railroads during the period and found that the bulk of the money went into politicians and politically connected rail builders pockets.
All of the railroads that received federal grants during the period ended up being money losers. I believe it was only the Great Northern, which was privately funded, ended up making money.
What the politicians did was fund the builders of the railroads, who in turn gave the politicians a large amount of stock in the construction companies.
The stock would obviously skyrocket due to the federal subsidies, allowing the politicians and crony construction managers to make a fortune in tax payer loot. The politicians would then sell the stock in the construction firms after the rail was complete.
It was all about building and never about profitable railway operations. Rail builders were paid by the mile rather than paid by the total efficiency of the route; thus, they had a large incentive to be as inefficient as possible and lay as much rail as possible to get from point A to point B.
No one cared if the railroads lost money or not.
CATO has produced as video short on this very topic:
If you want to listen to the lectures by Rothbard that dissect this looting of the tax payer by politicians, look here.