Free public transport makes a great deal of sense in a situation like this. Pollution relief, which is apparently the government's focus, will certainly occur, to a degree, but the bigger effect is more subtle, and more important. Very crudely: a half million people each losing 33 hours a year in traffic jams is 16.5 million lost man-hours of work, or shopping or eating or other economic activity. That is essentially a full work week lost. A work week is just a touch under 2% of a nation's economy. So, traffic jams are devouring 2% of Luxembourg's GDP.

Now then, Luxembourg's GDP is about $63 billion dollars, so the cost of traffic is $1.2 billion a year in lost economic activity.

I was unable to find the budget for Luxembourg's transport system. The New York MTA's annual budget in 2017 was $18 billion (so, the economy of Luxembourg is about 4 times as big as the New York subway budget - to give an idea of the differences in scale!). 5.7 million people ride the New York MTA every day, compared to 400,000 on the Luxembourg system. And, of course, the NYC MTA is vastly more complex, as New York is built on a series of islands, so there are tunnels, bridges and a ferry system to be maintained. Luxembourg has a river in it, nothing more.

Still, without accounting for the greater challenge of Metro New York transport, the NYC transport budget, scaled down to Luxembourg sise, would be about $1.2 billion per year, the same as the cost of loss of GDP to the traffic jams.

That looks almost like a wash, but it isn't. First of all, there is the significant diminution in pollution, in human stress (which leads to medical costs) and the improvement in quality of living. There's also all of that gas money that goes back into the pockets of civilians, to be spent.

Four fifths of gas prices in Europe are taxes, so reduction in gasoline purchases mainly means a reduction in taxes, not a loss in revenue to the private economy. Likewise, that shift of 1.2% of the economic from passive loss: siting in traffic, means 1.2% more work and more shopping. The private economy will grow by that, which means more money to spend in private hands. If we assume that the taxes in Luxembourg are at European norms of about 40% of income, total, increasing the economic activity by 1.2% means increased tax revenues of 0.48 billion, which means that the net impact to the Luxembourg treasury will not be the $1.2 billion in cost for public transport, but only on the order of $0.7 billion, in exchange for reduced pollution, reduced health care costs, greater quality of life, and greater private income.

There's a further consideration. Using NYC as the model again (and the cost of running the MTA in NYC is much higher than most other places because (1) Bridges, tunnels, islands, and (2) it runs 24/7. The transport systems of other countries do not run all night), 6% of the cost of the running the MTA is fare collection.

Without that cost, if Luxembourg's system casts $1.2 billion per year to run, in our model, it will only cost $0.6 billion net to operate.

In short: on balance, it is not a crasy idea for Luxembourg to make public transport free.

Philosophically, road and transport infrastructure is a cost of government everywhere. Making public transport free does not come at a particularly high net cost. The absolute cost of running the system drops by about 6% when you don't collect fares, and the net positive effect on the economy as a whole, both in terms of regained man-hours and in health terms, is substantial.

Certainly it means reduced revenues to the government, which has to find the money to pay for the trains from other taxes, and not by directly charging the passengers on the system.

The lowered cost of medical care from getting people out of cars and reduced pollution is probably where you make back nearly all, all or even more money. If I were running Luxembourg, I would do it.

Good, thoughtful analysis... Thank-you!

"A decision has yet to be taken on what to do about first- and second-class compartments on trains."

Oh, that's easy. For a country with enough excess cash floating aroung to make all public transportation free, make all the compartments first-class.

It is home to about 110,000 people, but a further 400,000 commute into the city to work. A study suggested that drivers in the capital spent an average of 33 hours in traffic jams in 2016.

So lets say the average working person does a 40hr work week like what we do here in the states that averages out to be them being in traffic for 8 minutes per day.

Maybe they should try out the traffic in the big ghettos we have in this country where the average time spent in traffic is over an hour each way!! When I lived in Denton and had to work at the VA hospital in S. Dallas it was a straight shot 40 mile run for me one way. If I went before rush hour it would take me about 35 minutes to make the trek, during rush hour over 2.5hrs. I found out it was faster to go down past the race track and into Ft Worth then cut across which was 100 miles but only took 90 minutes during rush hour. I saved an hour but drove over twice as far, don't you just love it.

it will only cost $0.6 billion net to operate.

So when public transportation is free, you don't expect any increase in ridership? What about the half-million who will no longer be driving? Will they walk to work?

Won't they have to double the number of trains and busses to accomodate a doubling (or more) in ridership? How much will that cost?

And what do they mean by "free"? Aren't the citizens of Luxembourg paying for it through their taxes? How will those citizens react when they're told that they now have to pay for the 200,000 people living in France, Belgium and Germany who use their public transportation?

Oh, that's easy. For a country with enough excess cash floating aroung to make all public transportation free, make all the compartments first-class.

Don't forget the champagne and caviar, oh and some toilet paper in the bathrooms.

Don't forget the champagne and caviar, oh and some toilet paper in the bathrooms.

Sure. Why not? It's free, isn't it?

42% income tax, 25% Social Security tax, and a 17% sales tax (VAT).

Sure. Why not? It's free, isn't it?

They'll either print more money or steal more from the responsible, so why not what the hell.

It's a progressive income tax, so everybody in Luxembourg isn't paying 42%.

The US income tax is 37%, top rate. Few people pay it.

We should just give all of our money to the government. Then they can decide what we need and get it back to us.

It's a progressive income tax, so everybody in Luxembourg isn't paying 42%.

Since the average salary in Luxembourg is $80,000 per year I'm guessing most pay very close to that.

We should just give all of our money to the government. Then they can decide what we need and get it back to us.

They know best, right?

They know best, right?

To hear Leftards tell it yes they do, problem is reality is so much different.

Yep - Luxembourg has high taxes, on very high salaries, in a place that has one of the highest standards of living in the world...and they've got a great deal of what many here would call "socialism" going on there - schooling and health care and public transportation in a country where most people are richer than Americans, better educated, healthier and live longer, with virtually no crime. Yeah, a real socialist shihole, thank God we're nothing like THAT!

Let me guess -- you're a travel agent.

Nah. Though I've been accused of being a double one.

Though I've been accused of being a double one.

Uh-huh. Agent 86.