Chris Reed has a must read article in the City Journal pointing out some of the extreme revenue assumptions made by the California High-Speed Rail Authority. For example, back in 2008, the rail authority claimed that once the L.A. to San Francisco line was complete that ridership would be a whopping 117 million passengers a year. Currently, that projection has now dropped to 44 million passengers per year. But even under this lower estimate "44 million passengers would be 50 percent higher than the number of people Amtrak caries to and from more than 500 stations in 46 states and three Canadian provinces each year." So where did this estimate come from? Incredibly, it was premised on future estimated gas prices of $40 per gallon. In addition, the public-opinion polls that were used to gauge the public's interest and potential ridership were questionable as 96% of those polled were already train riders who would be likely to support a high-speed rail.
With $3.5 billion of federal funds committed to the project, Reed argues that it can be thought of as "Solyndra times seven"--referring to the Bay Area solar panel manufacture that received $528 in federal loans before filing for bankruptcy.