Dave
Lackawanna Route of the Phoebe Snow
Chafford
Looking at the big picture is not a finance plan. There is a 'question' whether the United States can afford to build or rebuild its passenger rail network. Many politicians and rail advocates don't seem to worry about how to pay for it. But many economists, financial experts and accountants, including the Comptroller of the Currency, believe there is a financing problem.
The loaming financial problems for the U.S. are a pending train wreck. The scenarios for avoiding it are not pretty, although they are straight forward. The U.S. can implement a steep increase in taxes, one that could throttle the U.S. economy, to cover the federal debt burden, or it can slash Social Security, Medicare, and Medicaid, amongst other things, or it can opt for a combination.
If there is a market for expanded passenger rail, there is a way to finance it. Private enterprise! As soon as the free market pencil pushers see that there is money in passenger rail, they will sign-up in droves. Unfortunately, it not likely to happen in the near future, because the market for generating suitable returns is not there.
Rail in short, high density corridorsl, as well as expanded bus service, is a suitable alternative for short haul air service. And given the abundance of coal, as well as the potential for more nuclear power in the U.S., electrification of the rail lines may be feasible, although it is cost prohibitive now.
The Energy Information Administration projects that the U.S. will have decreased it dependence on petroleum based fuels by 15 per cent by 2020. How? By switching to alternative fuels. GM will introduce an electric car by 2010. So will Nissan and Honda. At first they will be short range vehicles, but as the technology improves, as it surely will, they will improve. Moreover, several months ago the U.S. Air Force tested a B-52 powered by bio-fuels. According to the press release that I read, it was successful. There is even a good probability that airplanes will be powered by alternative fuels.
Many rail advocates seem to think that the way we do things now is the way that they will be done in the future, i.e. power cars, airplanes, etc. The history of technology does not support this view.
Phoebe Vet wrote:Imagine what we could accomplish if we spent half as much energy finding ways to do things as we do finding reasons why we shouldn't even try.
Whether they are planning a vacation or a trip to the grocery story, most people ask themselves, at least subconsciously, whether they can afford the vacation or the items on the store list. I don't know anyone who thinks doing so is finding a way not to do something. It is prudent family financial planning.
The same concept applies to a business. If a business person has a good idea, i.e. a plan for a new service or product, she has to finance it. This means taking a game plan to her bank or investment bankers or venture capitalists for the money. They will ask a lot of questions, i.e. what is the market for the service or product, how will you pay off the investors, etc.? Again, I don't know any rational business person who thinks these questions are unreasonable or negative.
Only politicians, government officials, et. al., who are using taxpayer monies, seem to think that asking how something will be paid for is an attempt to find a reason not to do it.
Samantha:
Everyone told the guy who started FedEx that his idea would cost too much money and would not have enough customers to pay for it.
"Everyone" knew that very few people would pay $14 to have a package delivered overnight when the Postal Service would deliver it in a few days for under $2.
Most of the advances in civilization have been the result of people who found a way to do it while everyone else was making excuses why it couldn't, or shouldn't, be done.
Phoebe Vet wrote: Samantha:Everyone told the guy who started FedEx that his idea would cost too much money and would not have enough customers to pay for it."Everyone" knew that very few people would pay $14 to have a package delivered overnight when the Postal Service would deliver it in a few days for under $2.Most of the advances in civilization have been the result of people who found a way to do it while everyone else was making excuses why it couldn't, or shouldn't, be done.
All of the commercial advances in civilization were financed by someone. I have not seen any advocate for expanding passenger rail service in the U.S. say how to pay for it. In fact, I have seen very few proposals that are even backed up by a robust marketing analysis and strategic business plan.
Samantha et al- thanks for the comments. My intention was to stimulate a debate about what might work, not about how to finance it- that is beyond me. I do not understand why the rest of the world is willing to finance the US trade and budget deficits, despite a sharp decline in their dollar assets, but do believe they are not being entirely stupid. I do have a hunch that US policy this century will be driven by the desire to stay top of the economic hence military pile, against rapid growth of the Indian and Chinese economies, which, with even a third of the US GDP/capita will be larger. So rapid population growth in the US is essential, preferably with skilled, highly educated and motivated folk, including lots of Chinese and Indians. I do not know how US cities will develop to accommodate his growth. I saw a US Today article in 2006 that said the growth would be by large suburbs around existing conurbations- surely requiring rapid rail access to the city core, but only if Cities remain as we understand them today. I do not share the pessimism that says $252B over, say 20 years is out of the question- it all depends if the political climate is right. I do not believe that the time is right now.
Kumnant in a recent interview to my mind talks a lot of sense http://www.reuters.com/article/inDepthNews/idUSSIB27628520080612?pageNumber=1&virtualBrandChannel=0 He says that in the one proven 21st century Rail success story in the US, the North East Corridor, he is up against capacity limits, but is not sanguine even there that he will get the funds to build new equipment. That's how bad it is now. He recognises that everyone would love 200mph high-speed rail, but hints he doubts the ability of the US Government to do big infrastructure spending ever again. He gets beaten up over $40M. So he says he will be pragmatic- dead right. He says correctly that in the UK, Government spending on rail has increased five fold since 1990. A lot of this I am sure is because of excessive government interference and regulation-but that's the 21st century for you-and poor commercial acumen. The UK subsidy figure is now $12-13B per year- say half of what the US high speed proposal requires, but your economy is more than four times larger than ours, and in its innovative wealth creating capacity, to my mind much stronger still- hence $252B is possible if the need- and that's the key question- is there. Where I think Kumnant is wrong is to believe that some of the Public Investment he thinks US freight railroads need could be funded against passenger expansion. I think the freight railroads would grab all the capacity - when a new line in New Orleans was built for the eastward extension of the Sunset, the CSX used it as a parking lot. Lots of freight parking space is going to be needed in cities- capacity on the main lines is less of a problem.
Back to trains and railroads. I do think Samantha is right to say that US cities are fundamentally different in their geography to European ones, but as she says, you need a few beltway stations- as long as you 15-20 minutes drive from a station, that's great. On reflection, what I'm saying is this. I've never heard anyone articulate a vision of what the basic US high speed network would look like. I can't believe what I suggested was far wrong, but I would think any transportation major with access to intercity market size data could come up with a decent analysis of need, and show what the relative priorities were. I think there is then enough railfan brain in these forums to work out some basic plan for practicable routes into and out of conurbations, and terminal capacity needs, to define what should be ring fenced. I am sure that the longer we wait, the more it will cost- the ring fencing idea could however save very significant sums. You have plenty of free space between conurbations, and old railroads might provide the routes that could be developed- the PRR across Indiana, the Rock across Iowa. Are these highly valuable national assets, or just viable secondary freight routes?
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