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Bankrkuptcies, Profits, Subsidies, expectations.

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[quote user="henry6"] We love to compare our Amtrak to passenger services elsewhere around the world.  When what is stated favors our arguement.  Loading guage differences, ecnomic and accounting proceedures, and political philosophies are all different and often we are comparing apples to oranges.  In order to bring down the per passenger subsidy on Amtrak to a level equal to your automobile or airline ticket,  we have to have as many people riding Amtrak as we do driving cars and riding planes.   ....I wonder, since cars are used for communiting as well as pleasure and business, if we took all subsidies for rail oriented transportation (Amtrak, commuter) and compared it to the figure given for highway per person subsidy, how would that compare....[/quote] In FY10 the federal dollars transferred from the general fund to the Highway Trust Fund (HTF) were approximately $14.7 billion or 49 basis points per vehicle mile traveled (VMT). This is equivalent to approximately 1/2 of a penny per VMT. The transfer could be considered a subsidy if one does not work through the accounting, which shows that most motorists pay it indirectly to the extent that they pay federal taxes, as I have outlined in more than one post. The so-called subsidy for the airlines is similar, whilst the subsidy for Amtrak was in the neighborhood of 21 cents per passenger mile in FY10. Likening the subsidies for passenger rail to those for national defense, NASA, public education, national parks, etc. is a stretch. Amtrak is a failed commercial enterprise that competes with other commercial enterprises that are expected to cover their costs or go out of business. National defense, public education, policing, etc. has nothing to do with commercial enterprises.     Everyone benefits from a strong national defense, education of our young, etc.  Whether everyone benefits from Amtrak or passenger rail is arguable. Given that 88 per cent of Americans commute by car and less than 4/10s of one per cent ride Amtrak's long distance trains, placing national defense, education, and intercity passenger rail in the same bucket strikes me as over the top. Discounting the subsidies by assigning them to the population as a whole, as opposed to the users, is bad accounting and bad economics. However, if one wants to go this route, she should be sure that she understands the denominator.  For example, most people, including reporters, when they individualize the national deficit or debt, divide it by the total population, thereby showing a per capita debt of roughly $15,000 per person.  This number includes all persons, including new borns. It is silly.  Infants don't normally file a federal income tax return or make tax payments. And they don't pay for admittance to the national parks. If the calculation is made for adults, the number jumps to $45,700 per adult. But in 2010 49% of the adults who filed a federal income tax return paid no federal income taxes.  Thus, the number for people with a federal income tax liability jumps to $180,621 per filer. Put it on a household basis and the number creeps over $400,000.  Get the picture. To divide the per capita subsidy for Amtrak, National Parks, etc. across the whole population is an over simplification.  It is the users who benefit from the subsidy. The subsidies for Amtrak, the National Park Service, or whatever are in and of themselves a small portion of the federal budget.  Not to worry about it is the refrain of the folks who support the subsidy.  It is in the public interest, they tell us. But this is also part of the reason why the United States has a debt and deficit problem that could easily place us in the same league as Greece or Italy that have said for decades that their debt is sustainable.  After all, it's just a little bit in the total picture.  But the little bits add up. Just think Euro debt crisis.  No one wants to compromise on their goodies. Passenger rail enthusiasts insist that the country cannot do without passenger rail.  National Park supporters insist that we must subsidize the parks. Farmers claim that agriculture supports are essential for the nation's well being. Home owners, along with the real estate industry, argue that without subsidies the housing market will collapse, overlooking in their argument that people will have a place to live.  All these little subsidies for your favorite activity or mine add up. According to the Congressional Budget Office, the subsidies for Amtrak, National Parks, agricultural support, etc. (just a little bit of the whole) add up to nearly $600 billion per year. Taking that out of the national deficit would not solve the problem, but it would make a heck of a dent in it.
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