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[quote user="Falcon48"] <blockquote> <div><img src="/TRCCS/Themes/trc/images/icon-quote.gif" /> Bucyrus:</div> <div></div> I think it would be interesting to consider all of the off-book or externalized costs and credits that can be found.  But we need a definition of subsidy.  Making a profit or receiving a subsidy are not the only two outcomes possible.  For example, if Amtrak did not make a profit, but did cover its costs through fares and taxes provided only by the riders, it would not be receiving a subsidy.   So the question posed in the title of this thread is not an either / or question.  <div style="clear:both;"></div>   </blockquote>   Defining "making a profit" and "receiving a subsidy" is pretty simple, and can be done without all the fancy economic jargon.  Amtrak is "making a profit" if the bag of gold AMTRAK GETS from those who use its services (primarily passengers) and those who contract for its services (states, etc.) is larger than the bag of gold AMTRAK SPENDS to provide those  services.  And, in making that determination, it's important to include in second bag of gold ALL of the gold Amtrak spends to provide its services, without regard to whether the gold is for "operating" or "capital" expenses.  After all, a dollar is a dollar.  We can quibble whether all the gold spent in a particular year should, as an accounting matter,  be considered an expense for that year or "spread" over several years (that's the practical consequence of the distinction between "operating" and "capital").  But the bottom line is that, in order for Amtrak to be "profitable", the bag of gold coming in has to be larger than the bag of gold going out. If, on the other hand, the bag of gold AMTRAK SPENDS to provide its services is larger than the bag of gold AMTRAK GETS from those who use or contract for its services, Amtrak is generating losses, not profits.  I believe that is the actual state of Amtrak's finances.  Amtrak certainly does not "cover its costs" through fares or other revenues provide by riders or those who contract for its services.  The value that OTHERS GET from Amtrak service, or the costs OTHERS INCUR because of Amtrak's service are irrelevant to the question of whether AMTRAK is making a profit or incurring a loss.         Now let's turn to "subsidy".  Amtrak is "receiving a subsidy" if it's receiving bags of gold from someone (like the Feds) who does not use or contract for its services.  The amount Amtrak gets every year from the Feds to  to cover the shortfall between the amount Amtrak spends to provide its services and the amount it collects from those who use or contract for its services is a "subsidy". As I said before, this does not answer the question of whether the  Federal "subsidy" is or is not a prudent use of public funds.  It could well be that subsidizing some of Amtrak's services is cheaper for the government than paying for alternatives.  But that doesn't change the fact that the amount the Feds pay Amtrak to keep it afloat is a "subsidy".     <div style="clear:both;"></div> [/quote] I agree that it is easy to define profit.  But defining a subsidy is not as simple as you suggest.  First of all, the fed does not have any money to provide a subsidy.  The money must come from the taxpayers, and some of those taxpayers use the service.   <o:p></o:p> If a service were not making a profit, but its cost exceeding the fare box receipts were being paid for by taxpayers, and if all of those taxpayers were using the service, there would be no subsidy.  The taxpayers would simply be paying for what they use, partially through the fare box, and partially through their taxes.   <o:p></o:p> Now this perfect scenario is unlikely to occur because there will always be taxpayers who don’t use the service.  But I would say that pubic highways are much closer to this perfect scenario than Amtrak is.  Most taxpayers use the highways, whereas few of them use Amtrak.    <o:p></o:p> So, something that does not make a profit is not necessarily subsidized.  It is possible to not make a profit and not be subsidized.
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