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Is that bad? The real problem is when you're stuck only paying the interest, and the debt increases. If you were to buy something on your credit card, you're sp

Is that bad? The real problem is when you're stuck only paying the interest, and the debt increases. If you were to buy something on your credit card, you're spending most of your money to pay down the debt - but that's not particularly a problem unless you're living above your means. The alternative - to wait until you've accumulated enough cash to build a bus depot - seems kind of a bad idea.

traek 9y ago
> The real problem is when you're stuck only paying the interest, and the debt increases. That is what is happening at the MTA.
barney54 9y ago
One reason it's bad that MTA is only paying interest is that the transportation world is changing. Autonomy, Uber/Lyft, and other technologies may mean that subways systems like the MTA is in a death spiral where fewer riders means less fare revenue and less ability to even meet interest payments. In places like Washington, DC it looks like the death spiral is well underway.
- umanwizard 9y ago
  I guarantee no amount of self-driving cars, Uber, or any other car-related technology will make people stop taking the subway in New York. The car bridges and tunnels into and out of Manhattan are at full capacity all day long. It is vastly faster to take the subway in most normal cases.
  - candiodari 9y ago
    I've often wondered though why companies like the MTA don't transform their networks into things like Elon Musk's boring company type network
    - isostatic 9y ago
      Because the passengers per hour is far lower under musk's scheme.
      - StudentStuff 9y ago
        We're talking 25k to 45k passengers an hour on a train versus ~1000 people per hour with Elon Musk's Boring company. It isn't even vaguely competitive.
- specialp 9y ago
  There is absolutely no way any of this will replace the subway ever. All you need to do to see this is come to NYC when transit is on strike. The city is immobilized. There is nowhere in the USA that even approaches the density and mass transit usage as NY metro area. 8.8 million people plus the literal millions that commute to the city cannot possibly get around via surface transit alone.
JackFr 9y ago
It's not necessarily so bad. If the MTA were a private company, it's optimal capital structure would likely have a substantial portion of debt and some equity. That being said, it isn't a public enterprise, and its not immediately clear (to me) what the cost of capital for a government enterprise is.

traek 9y ago

> The real problem is when you're stuck only paying the interest, and the debt increases. That is what is happening at the MTA.

barney54 9y ago

One reason it's bad that MTA is only paying interest is that the transportation world is changing. Autonomy, Uber/Lyft, and other technologies may mean that subways systems like the MTA is in a death spiral where fewer riders means less fare revenue and less ability to even meet interest payments. In places like Washington, DC it looks like the death spiral is well underway.

umanwizard 9y ago
I guarantee no amount of self-driving cars, Uber, or any other car-related technology will make people stop taking the subway in New York. The car bridges and tunnels into and out of Manhattan are at full capacity all day long. It is vastly faster to take the subway in most normal cases.
- candiodari 9y ago
  I've often wondered though why companies like the MTA don't transform their networks into things like Elon Musk's boring company type network
  - isostatic 9y ago
    Because the passengers per hour is far lower under musk's scheme.
    - StudentStuff 9y ago
      We're talking 25k to 45k passengers an hour on a train versus ~1000 people per hour with Elon Musk's Boring company. It isn't even vaguely competitive.
specialp 9y ago
There is absolutely no way any of this will replace the subway ever. All you need to do to see this is come to NYC when transit is on strike. The city is immobilized. There is nowhere in the USA that even approaches the density and mass transit usage as NY metro area. 8.8 million people plus the literal millions that commute to the city cannot possibly get around via surface transit alone.

JackFr 9y ago

It's not necessarily so bad. If the MTA were a private company, it's optimal capital structure would likely have a substantial portion of debt and some equity. That being said, it isn't a public enterprise, and its not immediately clear (to me) what the cost of capital for a government enterprise is.