A recurring debate between the highway camp and the mass transit camp is, "Who gets the bigger subsidy?" The highway advocates argue that gas taxes cover most of the cost of roads, while mass transit is almost entirely dependent on government subsidies. Transit advocates respond that gas taxes really cover only a small fraction of total highway cost; highways are a lot more expensive than the other side admits.
Personally, I think this is the wrong debate. What matters is that a new piece of infrastructure produce a good return on the investment. Who pays for that investment is irrelevant. A road or rail line can be cost-justified even though the government is footing the bill. Or a road or rail line can be a big pile of crap, in which case it's a big pile of crap regardless of who pays. Obviously, when the public is footing the bill, it has an incentive to vet the cost-benefit analysis, but the amount of the subsidy, again, has nothing to do with that analysis.
The "highways are already paid for" argument is particularly off the mark. I could care less whether gas taxes cover all or just part of the cost of roads. Gas taxes are (or should be) levied to internalize externalities. What we do with the money after that is up to us; there’s no iron law that says the money must be plowed back into roads. If gas taxes earn a higher return somewhere else, they should be spent somewhere else.
So we ought to focus on which infrastructure will produce the best return. Sometimes the better project will be a road; sometimes it will be mass transit.
I know that it is impossible to perform a cost-benefit analysis without a full reckoning of the costs. To the extent the subsidies debaters are just trying to drag all of the costs out into the open, fine. But in the end, the subsidies debate cannot answer the big question, "What should we build?"
