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Whether passenger rail is subsidized by government, motorists, airline passengers, or freight carriers, it is a misuse of scarce economic resources.  And it props up a mode of transport that cannot stand on its own. There is an exception.  Passenger rail makes sense in relatively short, high density corridors where the cost of building additional highway and airway capability is prohibitive.  Subsidizing the capital costs for these projects is probably justified. Interestingly, some corridors cover their operating expenses.  If the subsidies were removed from all modes of transport, including motoring, some corridors, if they were managed properly, could break even.
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