That’s my point. After 2014.

The Ravitch plans proposes to borrow against the future revenues to pay for the capital plan through 2014. Then what?

For the 2005 to 2009 capital plan, among other things, they raised the sales tax for the MTA and borrowed against it. So can we use that sales tax revenue to fund the next capital plan? No, because the future revenues have already been spent.

“But as long as the income is greater than the debt service, we will eventually pay it off, and in 2048 or whenever that funding stream will probably be available again.”

So does that mean that the MTA has paid off enough debt in the past few years that some of the existing funding streams can be used for the next capital plan? No. Because the debt is going in one direction — up.

“It’s nowhere near as bad as you make it out to be.”

If that was true of the future, it would also be true of the past, and we wouldn’t be in this situation.

Another thing — I’m concerned that interest rates are going to explode. The FED is printing money like crazy. If they succeed, we’ll have a big increase in inflation — more than in the 1970s. If they fail, we end up with spiraling deflation. To hit the mark between the two in a wild, unsettle economic situation would take a miracle.

Looks like Malcolm Smith needs to change the game up. Strict partisanship was the problem with the old Albany – and Smith just doesn’t have the votes. He needs to either go bipartisan or at least find working coalitions on a wide range of issues.

Because it involves the MTA going deeper in the hole, and will force people to pay more indefinately while only paying for ongoing normal replacement (maintenance, really) for FIVE YEARS.

Last I checked, Larry, that was not at all clear, and I had asked you to point to the place where it said that. I’m not an accountant, but by my calculations, at 5% interest a $1.5 billion annual income will pay off $30 billion by 2048.

It’s true that it would never pay off $35 billion – 5% interest in 2015 would be more than $1.5 billion – but the interest may not be that high; current bonds (PDF) seem to be more around 4.75%.

Yes, obviously if we’re budgeting for $7 billion a year in capital expenses – and there’s no reason to expect the capital expenses to go down after 2014 – a sustainable funding stream would have to bring in more than $7 billion a year. But as long as the income is greater than the debt service, we will eventually pay it off, and in 2048 or whenever that funding stream will probably be available again, so it’s nowhere near as bad as you make it out to be.

Because it involves the MTA going deeper in the hole, and will force people to pay more indefinately while only paying for ongoing normal replacement (maintenance, really) for FIVE YEARS.

So what happens when something like that gets to the New York State Legislature?

Instead of can you top this, it’s can you sink lower!

Ravitch pandered to them. His report was a Valentine compared with what I would have written. There would have been some forensic accounting alright. Who was better off by how much while that $30 billion in debt was run up? And therefore, who should sacrifice now?

And there would have been NO new debt, except for projects that qualify for federal New Starts funding.

Ongoing normal replacement must been funded by ongoing revenues or the result is a guranteed repeat of the 1970s. And if that is the choice, I would rather have it happen now than later.