Train Wreck

Amtrak Infrastructure on Brink, DOT Warns
11/22/04 "The national passenger rail service risks a 'major point of failure' if infrastructure needs remain unaddressed, the U.S. Department of Transportation warned in a scathing report made public today." (Washington Post, Monday)

Of course for government, to receive a "scathing" report is to receive more money.

Economic consultants Jean Love and Wendell Cox and Cato senior fellow Stephen Moore argue, "Unfortunately, after 25 years of federal ownership and $13 billion of federal subsidies, Amtrak appears no closer to financial independence than the day taxpayer assistance began. This study shows that virtually every stated justification for continued Amtrak subsidies is based on myth, not reality.
--Amtrak makes a negligible contribution to the nation's transportation system. Amtrak represents just .007 percent of all daily commuter work trips and just 0.4 percent of all passengers making intercity trips.
--Amtrak's typical riders are not low-income Americans. Only 13 percent have incomes below $20,000.
--Amtrak has virtually no impact on reducing traffic congestion, pollution, or energy use. Even a doubling of train ridership would reduce energy consumption and traffic congestion by less than 0.1 percent.
--Amtrak is by far the most highly subsidized form of intercity transportation. The average taxpayer subsidy per Amtrak rider is $100, or 40 percent of the total per-passenger cost. On some of the long-distance routes, such as New York to Los Angeles, the taxpayer subsidy per passenger exceeds $1,000. It would be cheaper for taxpayers to close down expensive lines and purchase discount round-trip airfare for all the Amtrak riders."
--Cato Policy Analysis: "Amtrak at Twenty-Five: End of the Line for Taxpayer Subsidies," 1996,

Gregory Bresiger writes, "The problem, in a word, was politics. Unlike their transportation rivals, private railroad executives had never been good political players. For instance, in the 1970s and ’80s, aircraft and automobile lobbyists effectively argued that Lockheed and Chrysler could not be allowed to fail. Government loan guarantees saved those poorly run corporations. In the Penn Central crisis, there were no loan guarantees. With the birth of Amtrak in 1971, the railroads have become a plaything of politicians, with routes shaped to fit the pressures applied by key congressmen.[17] Red ink exploded.

It was once inconceivable that the government would own and operate America’s railroads; they were at the foundation of industrialization and so profitable they were a big part of the early Dow Jones Industrial Average. The debacle of the railroads is a stark reminder of what happens when government intervenes in the economy. The power to regulate is the power to control. It may not be the quickest method, but it is probably the surest way to socialism and then to ruin." --FEE Timely Classic : "Train Wreck" 1999