People spouting that oil company rationalization always quote the price AFTER the last explosive price increase. How does it compare to the price in 1970? You know, BEFORE OPEC got mad at us for supporting Israel and their seizure of Gaza and the West Bank and shut off our supply from the middle east.
Didn't the Tom Cruise character in "Top Gun" have a line about "a target-rich environment"?
If Samantha is "spouting" any kind of "oil company rationalization" regarding the high price of oil and the high price of gasoline, it should be noted that what are regarded as the "big oil companies" are responsible for a minority share of world oil supply, the majority share of which is in the hands of various governmental authorities, ranging from Medvedev's Russia to Chavez' Venezuala to Pemex to the Saudis. The Exxons may be making money hand over fist at everyone elses expense, but the Exxons are hardly the reason oil is so expensive.
As to the Middle Eastern situation, Gaza, the historical Judea and Samaria known as "West Bank", along with Sinai and Golan, were territories of established sovereign states of Egypt, Syria, and Jordan, where "West Bank" earlier on was a land grab by Transjordan, which renamed itself simply Jordan. Israel occupied Gaza, Sinai, Judea and Samaria, and Golan in the aftermath of a preemptive war waged by Israel against Egypt, Syria, and Jordan, one in which Israel had intelligence that those countries were poised to wage war to wipe Israel out but one in which Israel "got the drop" on them by some accounts. Those actions happened in 1967.
OPEC put the squeeze on oil supplies in 1973, but it was mainly a coalition of Arab states, OPEC being much broader than the Arab states, that embargoed the US in the aftermath of the October, 1973 Middle Eastern war. In that war, Syria and Egypt invaded Israeli-held territory -- in this case Israel did not attack preemptively and this situation was regarded as grave failure of Israeli intelligence that they did not read the warning signs. Using new types of Soviet-supplied anti-tank and anti-aircraft rockets, the Egyptians and Syrians inflicted heavy losses on the IDF, and were poised not only to recover the territories lost in the 1967 war but to conquer Israel itself. Had the IDF collapsed, no reasonable person believes that the Egyptian and Syrian armies would have stopped at the "pre-1967 borders."
Israel prevailed in the 1973 war, in part because of massive US resupply of critical arms, in part because the IDF was able to adapt its tactics to the new Soviet anti-tank and anti-aircraft rockets. A coalition of Arab states responded with the oil embargo; the Soviets responded to the Israeli encirclement and impending capture of the Egyptian invasion army with thinly-veiled threats of nuclear war.
In the aftermath of this, oil and gasoline went up in price in the US, but not up in price enough to stave off shortages -- the long gas lines many of us remember. Some economic historians question whether the Arab Oil Embargo was effective in that oil is "fungible", meaning that one barrel of oil, apart from differences in grade in sulfer content, is pretty much like any other barrel of oil on the world market, and that the gas lines were something we did to ourselves with the continuation of Wage and Price Controls on oil.
These events were followed by a couple years of plentiful oil and lower prices in inflation-adjusted terms, although the entire 1970s were a time of vigorous inflation.
In 1978, Iran saw the overthrow of the Shah Pahlevi and the Iranian Revolution. To my knowledge, there was no specific embargo of the US by Arabs or Persians or anybody else -- the political turmoil in Iran was enough to drive prices up and supply down. Not only were the prices high, but gas lines returned. These were the times of the inflation-adjusted $3.20/gallon gas.
The point is well-taken that the time of inflation-adjusted $3.20/gallon gas was not a Golden Age, rather, it was a time of high inflation and high unemployment. On the other hand, I don't remember gas as sticking me that hard in the pocket book. At the time I was driving a Ford Fiesta -- 35 MPG highway, 25 MPG in town in my usage. A lot of other people may have switched back to bigger cars, but I bought the thing just prior to the Iranian Revolution because I believed what I read in "serious" writings that oil was intrinsically in short supply. These days I drive a Ford Taurus -- 31 MPG highway, 21 MPG in town for me -- but for some reason the current gas prices feel a lot more painful. Part of it was that the $1.50/gallon gas prices of the intervening 20 years had me part with a 45 MPG highway, 33 MPG 1986 Chevy Nova for the bigger car Taurus with better crash-safety ratings.
What is going to happen is that the $140+/barrel oil is going to first put the squeeze on consumption. If that kind of price level is getting people in the US to cut back on gas usage, think of what it will do to other parts of the world. China, I am told, subsidizes its oil price, and how long do you think they can keep that up, especially when that subsidy and the energy content of all the stuff they make represents yet more money the Chinese are sending to the US for free. I am also told that many oil producing countries don't pay the full export price for oil internally, and one wonders how long those places can be lax about consuming their own oil for cheap when they can export it for big bucks.
In parallel with finally getting a cut in consumption, there will be new supplies "put online" in response to the big price increases. We will go through yet another cycle of a cutback in demand, a lagging increase in supply, another collapse in prices, followed by a slow buildup in oil consumption followed by another 20 years of people not doing anything to develop alternative energy or alternative transportation.
Why am I so confident that the "cycle" will repeat, that we are not at the "Hubbert Peak"? It could be that we are at a kind of Hubbert Peak, but the theory assumes a smooth Bell Curve build up and build down of oil consumption, which is not going to happen in the post 1973 world. What was different pre-1973 is that the Big Oil Companies indeed ran things, but increasingly oil supplies are nationalized. You have "rent seeking" behavior from various governmental entities, who think that the Big Oil companies, the folks with the expertise to explore, drill, ship, and refine oil are out to rip them off. Hence you have cycles of underdevelopment of the resource, a zoom in prices, greed will kick in to get the Oil Companies back in, a lag to put the supply on line, a collapse in demand, and the whole business all over again.
What this has to do with trains is that in my opinion, the advocacy community needs to take a longer view. To some, this is the long-awaited Hubbert Peak of oil which will drive the public into our arms demanding trains, but again, that we feel this way about the present crisis suggests that trains are a solution that we desire for other reasons, but we are going around looking for the Big Transportation Problem to get the rest of everybody to agree on that solution. Well, it might be the end of oil as we know it, or it might not be, but my advice is not to expend credibility forcasting that this is the end only to see the price of oil come down and people reverting to the old ways. As I said, we need to take a longer view and realize that these things go in cycles.
The other thing, it is my view that as passenger train advocates we need to tone down the presentation a bit -- our local advocacy group is big on the all-caps banners and the exclamation points and the scolding tone that trains are going to save us from whatever the problem is. I think we need to take a longer view, see beyond the present crisis, accept the proposed increase in Amtrak spending as a gift to the cause, and focus advocacy that the new money be spent ever so wisely.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
Phoebe Vet wrote:Another problem with quoting it "corrected for inflation" is that it negates the inflation that was caused by the explosive rise in the price of gasoline and diesel fuel.
Energy is about generally less than 10% of GDP, so if you want to knock 10 off the inflation adjusted numbers...does $1.80 sound much better than $2.00?
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Dave
Lackawanna Route of the Phoebe Snow
Phoebe Vet wrote: People spouting that oil company rationalization always quote the price AFTER the last explosive price increase. How does it compare to the price in 1970? You know, BEFORE OPEC got mad at us for supporting Isreal and their seizure of Gaza and the West Bank and shut off our supply from the middle east.How does it compare to March 2003. A month BEFORE we invaded and occupied the only non OPEC oil producing country in the middle east.
People spouting that oil company rationalization always quote the price AFTER the last explosive price increase. How does it compare to the price in 1970? You know, BEFORE OPEC got mad at us for supporting Isreal and their seizure of Gaza and the West Bank and shut off our supply from the middle east.
How does it compare to March 2003. A month BEFORE we invaded and occupied the only non OPEC oil producing country in the middle east.
It's a few years old, but the 1950s/60s typical price was roughly $2/gal in current dollars.
In nominal terms the price of gasoline in the United States may have increased many times over. But when adjusted for inflation, the price rise has not been nearly so dramatic.
In 1981 the average inflation adjusted price of a gallon of regular gasoline was approximately $3.20. Today, a gallon of regular gasoline in the U.S., according to the Energy Information Administration, costs an average of $4.095 per gallon. Thus, gasoline would have to increase to $6.40 in order to double the 1981 price, which was the previous inflation adjusted high.
sanvtoman wrote:The other night on the tube a man called Glen Beck tore into Amtrak with a vengence. I only caught a portion of the show but he stated how Amtrak has never made a profit. He also said how it costs between 60 and 100$ per passenger for the government to fund Amtrak. I dont recall all the particulars but he went on a tangent.
For FY ended September 30, 2007, the average federal subsidy per Amtrak passenger was $40.68, if one considers only the subsidy required to cover the operating deficit. If the state subsidies for state supported corridor trains, as well as the federal subsidy to cover capital outlays, are taken into consideration, the average subsidy was $53.48.
The subsidies differed between Amtrak's operational categories. The average subsidy for the NEC was $33.56, whilst it was $16.84 for state and other corridor trains, and $134.79 for the long distance trains.
Based on a projection of the first six months of FY 2008 results, the average federal subsidy per Amtrak passenger will likely decline by the end of the year. This is due to an increase in the number of passengers and revenue per passenger offset in part by higher fuel and maintenance costs, as well as an extraordinary charge for a labor settlement.
alphas wrote: Lots of train riders in Great Britain where gas is over $9.00 a gallon due to huge taxes. Do you want gas in the USA to be over $9.00 so you can get more trains? If so, you're in a small minority. If not, I think you just answered your own question.
Lots of train riders in Great Britain where gas is over $9.00 a gallon due to huge taxes. Do you want gas in the USA to be over $9.00 so you can get more trains? If so, you're in a small minority. If not, I think you just answered your own question.
Over the past forty years, American gas per gallon has gone up roughly eleven times over. In Britain the cost went up about four times over about $2.20 to $9.00. Some of this price increase is attributable to our own U.S. currency's deterioration relative to the British Pound, but some of it is that gasoline has always been at European "ouch-boing" levels, even in the Sixties and Seventies. And back then, the UK had an excellent nationwide system of trains, British Rail or "BritRail" for short -- I will say, though, that they had to be heavily subsidized. Passenger trains were privatized in the U.K. not so much because of sharply escalating demand but because operating the national gov't way simply cost too much and left no room for improvement or modernization. - a.s.
conrailman wrote: Is this Bill law yet? or in few" months in will be law?
Is this Bill law yet? or in few" months in will be law?
Correct me if I'm wrong, but I think the Senate has to come up with its own version ("resolution"), then that has to be reconciled with the House's resolution , then crafted into law, and then finally submitted to That Man in the White House. Veto-proof would be nice. So would the Senate's kind attention.
Is this Bill law yet? or in few months in will be law?
al-in-chgo wrote: <snip> Okay, but as someone else said on this thread or another, L-D intercity outside the NEC won't work if it takes the Mule all day to go from St. Louis to KC, MO or return. If there is a huge honkin' need for people to go from one met. area to another, if the scene has been privatized as much as in England of the Eighties, expect a bunch of point-to-point bus companies to develop. I AM NOT ADVOCATING FOR BUSES! There is no BUSES magazine AFAIK. But that's what happened in England when buses became faster (point-to-point) and cheaper than trains. So, as we've already been discussing, UP and Amtrak are going to have to work out something if that route's (among many) capacity is to enlarge significantly. BTW does UP control ALL the heritage routes between St. Louis and KC?
<snip>
Okay, but as someone else said on this thread or another, L-D intercity outside the NEC won't work if it takes the Mule all day to go from St. Louis to KC, MO or return.
If there is a huge honkin' need for people to go from one met. area to another, if the scene has been privatized as much as in England of the Eighties, expect a bunch of point-to-point bus companies to develop. I AM NOT ADVOCATING FOR BUSES! There is no BUSES magazine AFAIK. But that's what happened in England when buses became faster (point-to-point) and cheaper than trains.
So, as we've already been discussing, UP and Amtrak are going to have to work out something if that route's (among many) capacity is to enlarge significantly.
BTW does UP control ALL the heritage routes between St. Louis and KC?
The Bus industry over here was deregulated in the 80's and after three years of mayhem, the regional monopolies were replaced by er, regional monopolies who were subsidiaries of National bus firms.
British Rail was privatised in 1994. Buses are cheaper but not quicker in 95% of cases.
High speed rail was first proposed in Texas as early as 1970 but really was talked about in earnest starting in about 1987 with the proposal of the "Texas Triangle", or "Texas T-bone". Even as late as 2000 Sen. Kay Bailey Hutchison was pushing for it. Gov. Perry doesn't really like rail though and it interfered with his plans for his Trans Texas Corridor. There were other reasons than this on past attempts of course but that is a big one. There are still those out there who like the idea but as with any law, legislation, state or countrywide decision, it's up to a group to vote on rather than a few visionaries. It is nice to know that someone out there understands the need. I hope they can eventually convince the powers that be that this is in fact a doable proposition. If the Texas T-bone were built, I'd ride it all the time. I suspect many would. A side effect could be increased tourism due to quick and easy access to other Texas cities.
http://www.thsrtc.com/index.php?option=com_content&view=category&layout=blog&id=2&Itemid=3
Of course then there are those who just don't get it. This is from this Monday:
http://www.star-telegram.com/244/story/649033.html
I don't remember seeing anyone seriously propose the Texas T-bone as a maglev that could go Houston to Dallas in 50 minutes. That's not what the proposal is about. High speed rail does not have to mean "maglev".
The probability of getting efficient and effective passenger rail service between the cities in the Texas Triangle, at least for now, is not good. Part of the reason is because Amtrak is required to support a network of long distance trains that gobble up nearly 50 per cent of its variable operating outlays while taking in less than 25 per cent of its revenues.
If the long distance passenger trains, which serve less than one half of one per cent of the intercity travelers in the U.S. were discontinued, Amtrak would have approximately $515 million a year to help develop new rapid rail corridors. That does not sound like a lot of money. And it is not on a year by year basis. But between now and 2050, the year the Passenger Rail Working Group targeted for its vision of an expanded passenger rail network in the U.S., it could grow to $59 billion. And that is a significant chunk of change.
Sadly to say, developing a rapid rail network in Texas will require a partnership between the federal and state governments. I would prefer to see an environment - national transport policy - that promotes private enterprise solutions, but it is not likely to happen. Whether I will see rapid rail in the Texas Triangle in my lifetime is problematic.
I'm actually not talking clear across the country but rather what I consider to be shorter distance. In my case Houston to San Antonio. It's roughly a 4 hour drive. Trains leave here (Houston) for SA supposedly at 9:30 PM and arrive at 3:30 AM. That's 6 hours as opposed to 4 which isn't enough to cry over. It's not an expensive trip being roughly $60 per person or roughly what a tank of gas is for the average person to go there. You can only do this 2 days a week though and even then they average 5 hours late!!! They also average many delays during the trip. Keep in mind it's not going to be too easy getting a ride from the station to your hotel at 3 am nor is checkin particularly useful at that hour as checkout is typically noon. You can either wait or accept the fact that you'll waste a nights room fare on a few hours.
I don't see any money being spent here. From Houston to New Orleans is even worse. Our Amtrak station is under I-45 in a small rundown shed of a building in a bad little area. Homeless people live on the benches at the station. That doesn't sound like an enticing place to go catch a train, especially at night. It's not even fun to go there in the daytime. I won't even get out of the car there. Yes it's that bad!
I can't take a train from Houston to Dallas which is only slightly farther than SA from here. I take that back, I can. I have to catch the train to SA, then wait until later in the day, if you made it in time, to catch the train north through Austin, Waco, and eventually Dallas. This will take nearly 24 hours when it's all said and done and cost way more than any other method. I could almost bike it in that amount of time.
I don't consider any of this to be acceptable. I also don't consider it to be long distance. These should be no brainers as far as routes are concerned. For me, anything under 400 miles is cheaper, easier, and faster to just drive to. Anything over that is just better to fly to. I can't think of a reason to use the train at all and I wish I could. It works in other parts of the country but the money isn't going to be spent where it's needed. It's going to be spent where it isn't needed such as those places that already have established and useful passenger rail lines. We'd have to have a high speed rail line for me to even consider an Austin to San Fran trip and I know that won't happen in my lifetime which hopefully will be at least another 50 years or so. It won't even be on anyone's drawing board by then. I'd have a better chance of waiting for teleportation to be developed!
fredswain wrote:If they use these funds to help develop better long distance trains and right of ways, not to mention schedules, then it could be a good thing. Somehow I think they are going to focus mostly on where the trains are already at which isn't where more money really truly needs to be directed. For those of us in other parts of the country, such as here in Houston, this doesn't mean a thing. Then again Amtrak in general out of here is a joke. Spend some of that money here to insure that we can get 7 day a week service that leaves at a respectable time of day, rather than the middle of the night, and doesn't average 5 hours late. Then I'll be happy. Until then I'm still driving or flying.
Here is the reason long distance trains make no sense for all but a few people.
For a person traveling from Austin to San Francisco on August 15th, the one way fare on Southwest Airlines would be $98 to $135, depending on the time of departure. This is the Wanna Get Away fare. The trip would take about six hours and would include one stop, with a possible change of planes.
The Amtrak coach fare would be $385 going on The Texas Eagle and California Zephyr, while a roomette would cost $1,043. Going on the Texas Eagle to LA and San Joaquin to San Francisco, the coach fare would be $179. With a roomette to LA and coach to San Francisco, the tab would be $566. The travel time on the Eagle and Zephyr would be 79 hours, whilst the time on the Eagle and San Joaquin would be approximately 50 hours.
Even if aviation fuel prices doubled, the long distance train could not compete with the cost, time and convenience of flying. It is for this reason that the long distance trains should be discontinued in favor of more and better corridor trains.
AntonioFP45 wrote: Politics and disagreements aside, I've respected the President overall,
Politics and disagreements aside, I've respected the President overall,
The CURRENT President?
Lyon_Wonder wrote: House approves Amtrak funding WASHINGTON (AP) -- A nearly $15 billion Amtrak bill passed the House on Wednesday as lawmakers rallied around an alternative for travelers saddled with soaring gas prices.The bipartisan bill, which passed by a veto-proof margin of 311-104, would authorize funding for the national passenger railroad over the next five years. Some of the money would go to a program of matching grants to help states set up or expand rail service.Besides the $14.9 billion provided for Amtrak and intercity rail, an amendment to the bill would authorize $1.5 billion for Washington's Metro transit system over the next 10 years. The White House has threatened a veto, saying the bill doesn't hold Amtrak accountable for its spending. But similar legislation has passed the Senate, also with enough support to override a veto."Nothing could be more fitting to bring before the Congress today, on a day when gasoline has reached $4.05 a gallon across the United States on average," said Rep. John Mica, R-Florida, a longtime Amtrak critic who teamed up with Transportation Committee Chairman James Oberstar, D-Minnesota, on the legislation.Amtrak's previous authorization expired in 2002. The railroad's supporters say that a new authorization will allow Amtrak to make long-range plans and take advantage of what they say is a growing appetite for passenger rail.Unlike the Senate version, the House bill includes a requirement for the Department of Transportation to seek proposals from private companies to create a high-speed service that would take travelers from Washington to New York in two hours or less. The idea has long been championed by Mica, who says the United States must catch up with European and Asian countries on high-speed rail travel.Critics say the proposal would undermine Amtrak by peeling off its most valuable asset: the Northeast Corridor.Rep. Bill Shuster of Pennsylvania said provisions that open the door to private investment should help ease the concerns of fellow Republicans who have balked at supporting Amtrak.But those provisions could complicate things when the House tries to work out a compromise bill with the Senate.Amtrak said it was pleased that both the House and the Senate had acted."This reflects strong support for intercity passenger rail service, and we look forward to working with Congress as they move forward to reconcile a final authorization bill," spokesman Cliff Black said.The Bush administration and other Amtrak critics want to see the company move toward self-sufficiency, but Amtrak supporters say passenger railroads around the globe require government subsidies and point to the large sums of federal money spent on highways.A bid by Rep. Geoff Davis, R-Kentucky, to send the bill back to committee to add an alternative fuel study was rejected."In the areas where American budgets are being hardest hit by gas prices, consuming 16 percent of gross incomes, they have very little access to Amtrak," Davis said. "How does this bill help those Americans deal with our energy crisis?"Amtrak's boosters say the high cost of driving has made people eager for more and better rail service.A record 25.8 million passengers took Amtrak in the last fiscal year. The railroad expects ridership to approach 28 million this year, Black said.May was the biggest month in Amtrak's 37-year history, with total ridership up 12 percent over last year and ticket revenue up 16 percent over last year. Black said Amtrak's marketing research indicates that about half the increase can be attributed to gas prices.
WASHINGTON (AP) -- A nearly $15 billion Amtrak bill passed the House on Wednesday as lawmakers rallied around an alternative for travelers saddled with soaring gas prices.
The bipartisan bill, which passed by a veto-proof margin of 311-104, would authorize funding for the national passenger railroad over the next five years. Some of the money would go to a program of matching grants to help states set up or expand rail service.
Besides the $14.9 billion provided for Amtrak and intercity rail, an amendment to the bill would authorize $1.5 billion for Washington's Metro transit system over the next 10 years.
The White House has threatened a veto, saying the bill doesn't hold Amtrak accountable for its spending. But similar legislation has passed the Senate, also with enough support to override a veto.
"Nothing could be more fitting to bring before the Congress today, on a day when gasoline has reached $4.05 a gallon across the United States on average," said Rep. John Mica, R-Florida, a longtime Amtrak critic who teamed up with Transportation Committee Chairman James Oberstar, D-Minnesota, on the legislation.
Amtrak's previous authorization expired in 2002. The railroad's supporters say that a new authorization will allow Amtrak to make long-range plans and take advantage of what they say is a growing appetite for passenger rail.
Unlike the Senate version, the House bill includes a requirement for the Department of Transportation to seek proposals from private companies to create a high-speed service that would take travelers from Washington to New York in two hours or less. The idea has long been championed by Mica, who says the United States must catch up with European and Asian countries on high-speed rail travel.
Critics say the proposal would undermine Amtrak by peeling off its most valuable asset: the Northeast Corridor.
Rep. Bill Shuster of Pennsylvania said provisions that open the door to private investment should help ease the concerns of fellow Republicans who have balked at supporting Amtrak.
But those provisions could complicate things when the House tries to work out a compromise bill with the Senate.
Amtrak said it was pleased that both the House and the Senate had acted.
"This reflects strong support for intercity passenger rail service, and we look forward to working with Congress as they move forward to reconcile a final authorization bill," spokesman Cliff Black said.
The Bush administration and other Amtrak critics want to see the company move toward self-sufficiency, but Amtrak supporters say passenger railroads around the globe require government subsidies and point to the large sums of federal money spent on highways.
A bid by Rep. Geoff Davis, R-Kentucky, to send the bill back to committee to add an alternative fuel study was rejected.
"In the areas where American budgets are being hardest hit by gas prices, consuming 16 percent of gross incomes, they have very little access to Amtrak," Davis said. "How does this bill help those Americans deal with our energy crisis?"
Amtrak's boosters say the high cost of driving has made people eager for more and better rail service.
A record 25.8 million passengers took Amtrak in the last fiscal year. The railroad expects ridership to approach 28 million this year, Black said.
Passenger rail, with "very few" exceptions is not profitable. The president of the SCL pointed out back in the late 1960s that the NY to FL trains were still making a very small profit, but that a single lawsuit could quickly wipe that out. Many people in this country want LD service and are willing to use it if there is more of it with faster schedules. With the mindset of the freight railroads, congressional critics and the liability issues Amtrak is going to have a tough time......even with decent funding.
Many people in this country want LD service and are willing to use it if there is more of it with faster schedules. With the mindset of the freight railroads, congressional critics and the liability issues Amtrak is going to have a tough time......even with decent funding.
Beating on the drum that passenger rail is not profitable and cannot be profitable works in both directions. On one hand we are trying to say that to have the social benefits of passenger trains, society needs to be forthcoming with money. On the other hand, are we saying that to have passenger service, we are going to have to pay and pay?
If the president of SCL said they were making a small profit, but one small enough that a liability lawsuit could turn it into deficit, that at least conforms to the subsidy model people had in mind at the inception of Amtrak. Trains would receive a subsidy, but a small subsidy to make up for a small shortfall in profits that was going to do away with trains altogether. What Amtrak has turned into is large rates of subsidy, and that is why you have the critics sharpening their knives.
The refrain in the advocacy community has been that Amtrak has been laboring under "inadequate funding." I suppose the funding was inadequate because for whatever level of service Amtrak was providing, the funds were barely keep the trains operating, let alon make any improvements. Whether that was the fault of Amtrak being inefficient or the fault of Congress for not allocating more money, it is factual to say that Amtrak has been given enough money to barely get by. But every time someone in the advocacy community brings up the "trains never make a profit" argument and that "Amtrak reform proposals are ignoring the known facts", this to me sounds like coming down on the side that there is no efficiency to be gained from Amtrak and that proportionately more service will require proportionately more subsidy money.
Now to say that Amtrak will be getting, I assume, "decent funding", but that Amtrak is laboring against so many obstacles that this decent funding may not result in success, what are we saying? That a successful Amtrak will require "lavish funding"?
As I said, the poor-mouth argument works both ways. It could be an inducement to spend more money on Amtrak to make it successful, or it could be an argument just to shut the whole thing down.
I'm just glad that Norm Mineta is no longer the Transportation Secretary.
Politics and disagreements aside, I've respected the President overall, but how is it that he and his administration keep pushing for self-sufficiency when he's had the facts under his nose: Passenger rail, with "very few" exceptions is not profitable. The president of the SCL pointed out back in the late 1960s that the NY to FL trains were still making a very small profit, but that a single lawsuit could quickly wipe that out.
"I like my Pullman Standards & Budds in Stainless Steel flavors, thank you!"
Phoebe Vet wrote: One of the things I have noticed in almost every debate, on any subject, is that people tend to think in black and white. I tend to think in shades of grey.I wonder about solutions like:What if a government agency used eminent domain and public construction funds to build a high speed rail line in a high density corridor then operated it like a toll road. Then anyone who could afford to buy one train could start passenger service. Many companies could offer competing service along the same right of way.What if a government agency used eminent domain and public construction funds to build a high speed rail line in a high density corridor then sold it to a private company.What if a government agency used eminent domain to acquire a right of way sufficient be used for high speed rail and then leased it to a private company.Surely their are other ideas that have not occurred to me.
One of the things I have noticed in almost every debate, on any subject, is that people tend to think in black and white. I tend to think in shades of grey.
I wonder about solutions like:
What if a government agency used eminent domain and public construction funds to build a high speed rail line in a high density corridor then operated it like a toll road. Then anyone who could afford to buy one train could start passenger service. Many companies could offer competing service along the same right of way.
What if a government agency used eminent domain and public construction funds to build a high speed rail line in a high density corridor then sold it to a private company.
What if a government agency used eminent domain to acquire a right of way sufficient be used for high speed rail and then leased it to a private company.
Surely their are other ideas that have not occurred to me.
One of the ways to put rail on a par with highways and airways would be for the government to own the rails and allow anyone who meets the required standards to operate freight and passenger trains on them. Unfortunately, given the debt load of the U.S., coming up with the money to buy the existing lines would be a super difficult challenge. Moreover, the existing railroads would push back hard on the idea.
Investor owned companies use eminent domain if they have been empowered by the government to do so. Investor owned utilities (electric, gas, water, etc.) do it all the time.
Prairietype wrote: It is the chief reason why something like this MUST be public. Another comparison could be made to airport development. No big airport was ever built in a day, and none are ever built by the airlines. An airport is equivalent of the the rail corridor and everything that goes into it.The Senate should go along with this House version and let it be. In fact the private sector provision may even please the President, not that he can or will do anything about it.
It is the chief reason why something like this MUST be public. Another comparison could be made to airport development. No big airport was ever built in a day, and none are ever built by the airlines. An airport is equivalent of the the rail corridor and everything that goes into it.
The Senate should go along with this House version and let it be. In fact the private sector provision may even please the President, not that he can or will do anything about it.
How will the proposed funding for Amtrak, as well as other intercity rail projects, be covered? Will there be offsets in other spends or will the federal deficit be increased?
If the market for intercity passenger rail is not robust enough to attract private enterprise, what is the justification for spending taxpayer money on it? This is especially true for people who don't have access to passenger rail, which would be large parts of the U.S.
I can understand using tax money to support local transit systems. They fill an important social role. They provide transport for the poor and working poor who otherwise could not get around, or at least would have a great deal of difficulty doing so. I can also understand using public monies to fund some commuter rail, barring a change in how we charge and pay for transport in the U.S., as per my comments regarding subsidization. But subsidizing an affluent passenger traveling from New York to Washington on a high speed train is a bit difficult to justify.
Most airports in the United States, outside of converted military fields, were built by local authorities. They were financed with tax free bonds. Tax fee means that the interest, plus the gains or loses, are not taxable to the investor. With the exception of a handful of new airports, e.g. Austin, Denver, or expansion of some of the older fields, e.g. DFW, Charlotte, the bonds have been retired. They are a sunk cost.
The issuer of tax free bonds (the airport authority) incurs less interest expense than the issuer of fully taxable bonds. Thus, the users and vendors benefit from slightly lower landing fees, hanger fees, store rentals, etc. The difference, however, is marginal. Thus, except if the bond issuer defaults on them, which I don't think has ever happened with airport revenue bonds, the airlines, as well as other users, actually pay for the construction and maintenance of the airport. The airlines, contrary to popular belief, are not getting a free ride.
The only cost to federal taxpayers would be the tax revenue difference between tax free bonds and fully taxable bonds. If the bonds were general obligation bonds, as opposed to the more common revenue bonds that are issued to build airports, local taxpayers could get stuck with some or all of principal outstanding in the case of a default. And the U.S. Treasury would take a slight hit because the holder could declare a loss on his or her tax return. The probability of such an event is rare. Last year, for example, less than one per cent of the issuers of municipal bonds defaulted on them. In fact only about one to two per cent of the issuers of investment grade corporate bonds, which are riskier than municipal revenue bonds, default on them.
As an example, if an airport board had issued recently $6 billion of fully taxable bonds, at the U.S. Treasury long bond rate, which today would be 4.375 per cent, the interest cost would have been $262.5 million per year. Issuing tax free or municipal bonds, in the same environment (the average rate would be about 3.8 per cent) would have attracted an interest charge of $228 million or a spread of $34.5 million. The difference could reduce tax revenues, but the exact amount would depend on the marginal tax rates of the investors. If all of the bond holders were in the 35 per cent marginal tax rate, the annual loss of revenue to the U.S. Treasury would be $12.1 million a year.
The loss in tax revenue would be offset in part by a reduction in the business expenses of the users (airlines, general aviation, business aviation, etc.) and the airport vendors. Because they pay lower landing fees and rentals, the airlines and vendors would have greater taxable income than would otherwise be the case, all other variables held constant. And greater taxable income means more tax revenues for the national treasury. The caveat would be if an airline or airport occupant loses money and, therefore, does not have any taxable income.
At the end of the day, the net reduction in taxable revenue is minimal. In fact, depending on timing, allowing airports to be built with tax free bonds is probably a zero or nearly zero sum game.
If some company wants to spend a gazillion dollars for a plan that would get DC to Penn Station passengers there, let 'em do it. Provided its their money, of course, not the taxpayers'.
At what it would likely cost, I don't see a profitable market in it.
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