Edit post

Edit your reply below.

Post Body
Enter your post below.
[quote user="schlimm"] [quote user="Sam1"]The operating subsidy per passenger mile is a variable of the gross passenger load and would be influenced by market density.  If more passengers can be attracted to the train, the subsidy per passenger mile would go down and, if enough passengers were attracted at a rate high enough to cover the operating costs, the operating subsidy could be eliminated.  Realistically, the probability of this happening in the foreseeable future is low.[/quote]  You mention many statistics and I do not doubt their accuracy but I wonder precisely what is their source?  It isn't cited.  I don't think most folks expect train revenues to cover the operating costs, because there are other benefits.  Ditto with transit systems.  Another way of putting it is that the full cost to society of many endeavors is not found on a corporate balance sheet.  There are many hidden subsidies.  You disparage other countries' accounting standards, but the example of Arthur Anderson and Enron and others makes that sound like the kettle...[/quote] All of my financial information, including statistics, comes from published financial statements, as well as reports generated by Amtrak, FAA, U.S. Department of Transportation, General Accountability Office, etc.  Since you did not mention a specific statistic, I don't know which one you are referring to.  I also rely on accounting and economic theory, i.e. higher units (passengers) spread over fixed costs reduce the amount of fixed cost allocated to that unit.  The same concept applies to some but not all variable costs.  Most Americans are financially illiterate.  They are clueless when it comes to understanding how transport in the U.S. or anywhere for that matter is funded.  On several occasions, whilst riding Amtrak, I have chatted with my fellow passengers about Amtrak's finances.  What I get, more often than not, is a deer in the headlights look.  They don't have a clue how passenger rail in this country or any other country is funded.  Most of them don't even understand the costs associated with driving their automobile. The full cost to society would not be found on any balance sheet.  It is a statement of position.  Costs are found in the income statement and, by inference, in the statement of cash flows.  Irrespective of where they are found, at the end of the day, there is no free lunch.  Every economic activity, including transport, incurs a cost.  And someone has to pay it.  If the users don't pay for it, the taxpayers have to take up the slack. Other countries follow accounting standards that would not cut it in the U.S.  Europeans, for example, allow for much more wiggle room in their accounting than we do in the United States.  And in my opinion some of their practices, whilst within their acceptable framework, strike me as a bit dodgy.   The French rail system, for example, attributes certain station restaurant revenues to train operations.  It also appears to allocate certain transfer payments to high speed rail operations without providing detailed information about the transfers.  That would never fly in the U.S.     Enron was an anomaly.  The problems did not arise because the U.S. has a fundamentally flawed accounting system.  They arose because Enron cooked the books and Anderson did not catch it, which happens from time to time.  The Enron perpetrators went to jail.  And Anderson went out of business.  Ultimately, the system worked.  Enron was a Fortune 500 company.  It, along with maybe 15 to 20 other companies, was caught using fraudulent accounting, which is a fancy term for cooking the books.  Thus, during an unusual period, approximately four per cent of the Fortune 500 companies engaged in inappropriate accounting practice.  The percentage of businesses that are guilty of fraudulent accounting is generally less than one per cent.   No accounting system is perfect.  But the U.S. system is considerably more robust than the system used in Europe, which is also the system that is used in Australia, where I lived and worked for more than five years.  I am familiar with both systems.  I'll take the imperfections of the U.S. system to the imperfections of the European system.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag