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Strawman has it mostly right, but errs I suggest when criticising public transport. The reason (initially) for publicly provided road and indirect financing through rego and fuel taxes was the transactions costs of tolling. Given that, on second best grounds there was a case for subsidising public transport also. It is most probably incorrect to say that subsidising mass transit systems increases congestion. Certainly such subsidies increase the total number of trips taken, but there is also substitution out of cars and onto trains as a result. The result, arguably, is less congestion than with an (uncharged) road system alone. Of course, imporvements in tolling technology have all but done away with the transactions costs arguement, so there is now no reasons (apart from political inertia) for not charging directly for road use. In turn, as tolling spreads, the case for subsidising public transport will diminish. Richard
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