This is just one of the Innovative Ways to Stimulate the Economy suggested by DailyFinance contributors. See them all.
Want to stimulate the economy? Make buses, subways, commuter rails, and trolleys free. With gasoline prices sky high for much of last year, public transit ridership surged, reaching its highest level since the 1950s. The American Public Transportation Association says Americans took 10.7 billion trips on mass transit in 2008, and a fare holiday would put money back in those riders' pockets.
Subsidizing transit fares would also encourage drivers to leave their cars at home, saving them money on gas -- not to mention cutting down on traffic and pollution. And if some commuters find they prefer taking the bus or train during the holiday, all the better. The APTA estimates they could save an average of nearly $8,500 a year by taking public transit even without a free ride.
Making public transport free would require the federal government to cut a big check to local transit authorities -- completely forgoing fare revenue would really hurt. But even if a fare holiday proves too costly or politically difficult, it'd still be a good idea to give transit authorities more aid. The recession is hurting them, too.
The Metropolitan Transit Authority, which oversees New York City's subway and two of the three busiest commuter rail networks in the United States, is just one example. Its managers say the system needs to raise fares and slash service to plug a $1.2 billion hole in its budget. A direct cash infusion for transit agencies or a program to guarantee their debt could forestall fare increases, saving riders money. Preventing service cuts could keep workers who rely on transit to get to work from losing their jobs (not to mention keeping more transit workers employed).
Though gas prices have fallen nearly 40 percent since this time last year, they won't stay low forever. As soon as the economy begins to show signs of life, rising energy demand will push the price of oil higher, and the price of gas will follow. When that happens, a free ride on public transit will sound like an even better idea.
Do you think this would stimulate the economy? Tells us why, or share your stimulus ideas. And see more of our Innovative Ways to Stimulate the Economy.