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Looming Transportation disaster? Suppose Subsidies are a good thing.
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<p>I would not describe myself as a Libertarian, although I can see how one might come to that conclusion. I support free markets, but ones that are regulated by independent government agencies (federal, state, and local). </p><p>Free enterprise should have first crack at providing a commercial activity, i.e. commercial transport. Government(s) should create a framework to encourage it, but should not provide the service, except under special circumstances where social welfare demands it. If free market players cannot make it because the users will not or cannot cover the cost of the service, those players should be allowed to go under. Thus, when it became clear in the 1960s that private enterprise could not continue to run passenger trains, the government should not have created Amtrak to operate intercity passenger trains that few people wanted and only a small percentage used. </p><p>Using its regulatory powers government should ensure a level playing field in the market place. It should ensure that transactions are fair, open and honest; protect the welfare and health of employees; and ensure that consumers are treated fairly. But only under special circumstances should it be involved in a commercial activity.</p><p>Ideally, the true cost of all forms of transport would be passed to the user at the purchase point, e.g. pump, ticket counter, freight invoice, etc. Unfortunately, this has not happened and is not likely to happen. Transport in the U.S. is hooked on subsidies. It is unlikely that they will go away. </p><p>Government should subsidize public transport where failure to do so would work a serious hardship on a significant segment of the population. </p><p>The first that comes to mind is public transit, i.e. buses, light rail, commuter rail, etc. A significant percentage of Americans, especially those in large cities, could not get around without public transit. And many of them could cover the cost of the service. </p><p>The second is rapid rail in highly congested corridors where expansion of the airways or the highways would be cost prohibitive. Passenger trains from New York to Washington or Chicago to Milwaukee or LA to San Diego make sense. Long distance trains do not. And as Paul M points out, given the limited resources available to optimize passenger rail under the aforementioned conditions, the dollars should be concentrated where they can have a meaningful impact as opposed to fritted away on low value alternatives.</p><p>If government support is required for a commercial activity, e.g. commuter and corridor rail, the operation of the trains and support activities should be outsourced to private contractors. They are likely to run the system more effectively than government. The threat of losing the contract tends to keep contract operators sharp. </p><p>I have been a rail buff since I was 10 years old. I have ridden over every mile of the Amtrak System with the exception of Chicago to New Orleans, plus many other miles that no longer have passenger trains. I have ridden trains in Australia, Canada, New Zealand, and Great Britain. I love them. But I am also a retired CPA who is worried about the debt (current and pending) being laid on this country. And I have grave misgivings when people argue for more trains or more transit or high speed rail without saying how they would pay for it. Because someone must pay! There is no free lunch. </p>
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