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Don Phillips' writing in the November 2008 Trains issue
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[quote user="henry6"][quote user="Bucyrus"] <p> But the projects that private enterprise cannot make a profit on are the ones that amount to a subsidy to the users. Sure government can do that better than the private sector with those kind of endeavors because the private sector does not have the power to take money away from people. So the government is better with projects that redistribute wealth rather than make a profit, but how far do you want go with redistribution? </p><p>You have referred to need as though it is the government's responsibility to eradicate it.</p><p>[/quote]</p><p>First, define profit, or rather enough profit. I remeber about 20 years ago there was a store chain around Upstate NY that earned an annual profit of about 8% but since the owners wanted 12-15% profit, they closed the stores saying they were'nt making enough money. So, I'd like to hear more about profit margins per business rather than just profit vs. no profit and when does not enough profit mean no profit and gives a business the right to bail out or seek a bail out?.</p><p>Based on that and the "goverments responsibility", if there is a need to move 10,000 people from point A to point B daily and a railroad company says it needs more profit or a subsidy to make up the loss and lets say such subsidy would be $10,000 a day. If there was no highway available to absorb the auto traffic represented, or if the cost of providing an adequate highway would be well in excess of $10,000 a day, would it not be prudent of government to pay the railroad the subsidy rather than build a new highway? Or would it be reasonable to expect private business build a new highway? </p><p>[/quote]</p><p>The answer to the first part of your question is that the definition of <u>enough</u> profit is whatever it takes to get a private businessperson to invest and operate a given business. There is no set amount. It depends on the rate of return that a business investor is willing to settle for and the amount of risk that he or she is willing to take. </p><p>I only mentioned the concept of enough profit because you have previously stipulated that government needs to step in and provide things if business can't make a profit doing it. So my use of the term, <em>enough</em> was simply to address the fact that you have implied a threshold above which private business would be willing to provide a service in lieu of having it done by the government. </p><p>You have now taken this in a strange new direction by asking how low profit can be before a business has a right to quit or refuse to begin. A private business does not need to justify their profit level to anybody other than their investors, and they are not required to keep operating a business just because there is a need for what they do and their customers feel that the business's profit is adequate. </p><p>Regarding your last question: What would be reasonable would be that if 10,000 people have a need to move themselves, they should pay for it themselves and not expect the government to either build them a road or a railroad.</p>
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