The federal government is putting a hold on funding that would aid the California high-speed rail project, but the state apparently didn’t get the memo.

The Trump administration has suspended, pending the completion of its proposed budget, a decision on a $647 million grant intended to electrify Caltrain commuter rail tracks, which would ultimately be used by the high-speed rail system. As these pages noted about two weeks ago, all 14 congressional Republicans sent a letter to Transportation Secretary Elaine Chao, asserting: “We think providing additional funding at this time to the Authority would be an irresponsible use of taxpayer dollars.”

The letter cited a confidential Federal Railroad Administration report that concluded that the initial 119-mile segment of the system in the Central Valley could cost 50 percent ($3.6 billion) more than estimated.

But the state has nonetheless doubled down on the project. On Friday, the Finance Department approved the California High-Speed Rail Authority’s request to ask the State Treasurer’s Office to issue $2.6 billion of the nearly $10 billion in funds authorized by the 2008 bond measure narrowly approved by voters.

The state also appears nonplused by the fact that its major ongoing revenue source for the project, the proceeds from the state’s “cap-and-trade” auctions, seems to be drying up. Just a small fraction of the pollution credits up for sale have been sold in the last year, threatening the hundreds of millions of dollars the bullet train expects to receive annually. In the most recent auction last month, just 16.5 percent of the emission allowances were sold at the floor price, netting just $8.2 million for the state (and only about $2 million of that for high-speed rail) out of a possible $600 million.

The Legislative Analyst’s Office noted in 2012, when the cap-and-trade program first got up and running, that the use of such proceeds was “very speculative,” and cautioned that using them to fund the high-speed rail system might be illegal, since they were supposed to be used to mitigate greenhouse gas emissions but the high-speed rail system will actuallyincreasenet GHG emissions for at least several decades due to construction and operation effects.

The cap-and-trade program itself is facing great uncertainty. A lawsuit challenges that the program’s “fees” are an unconstitutional tax, and the Legislature has yet to extend the program past its current sunset date of 2020.

From the very beginning, the California High-Speed Rail Authority’s business plans have been based more on hope and fantasy than on sound finance or economics. Proponents seem to have adopted the “in for a penny, in for a pound” strategy: Just grab as much money as you can, as quickly as you can, and start building. Once the track has been laid, there is less likelihood the public will mount strong enough opposition to stop the project, which might be seen as wasteful and cost even more money to tear up the track.

But there is a saying in economics: “Sunk costs are sunk.” That money is gone, and sometimes it is best to just cut your losses, rather than continuing to rack them up. Or, as actor and humorist Will Rogers once said, “If you find yourself in a hole, stop digging.” The same holds true if you’re laying tracks for California’s high-speed rail project.