Hemphill's January column - Government dole

[Anonymous]

Mark-

Point taken. I think your position has definite merit.

A rational transportation funding policy would certainly have benefits for both the present and the future. The capacity of our highways is not endless and the vastly increased costs security, particularly in passenger aviation would certainly seem to make investment in rail capacity a necessity.

LC

[Anonymous]

MWC: I'm trying to get my mind wrapped around your macroeconomic statements in your recent post in this thread:

"We will road-subsidize, real-estate-developer-subsidize, and airport-subsidize our country into an economic hole-in-the-ground from which we will find it difficult to dig out."

What hole-in-the ground? Was the U.S. economic growth of the 20th century an illusion? Compared with which other country(ies)? The the real-estate-constrained, railroad-subsidizing, fly-by-government-fiat states of Europe?


"We have a wonderful transportation system in this country, but its operating costs, and the operating costs of the residential, industrial, and commercial patterns the transportation system enables, are person-for-person the most expensive in the world."

Are they not the most productive in the world? I'm sure the bicycle-driven economy of India has a lower per capita transportation cost, but the Indians sure don't want to stay mired in that mud.


"As long as we get sufficient value for the dollars we spend, we can get away with anything. The market says we are NOT getting sufficient value. That's why the dollar is plunging like a bus into a third-world ravine."

Currency value fluctuations are being driven by the relative transportation costs across borders? Alan Greenspan must have missed that! When the $US was strong against the Euro, say three years ago, was the U.S. economy structurally different?


"Unless we want to personally experience what the fall of Rome felt like, we might want to look around for cheaper transportation solutions."

Gosh, I didn't realize it was all those subsidized paved Roman ROADS that caused the fall! And the Mediterranean was right under their noses!


"I think railroads will give us some cheaper solutions, but the economic bias we're creating by our heavy subsidies to other transportation forms (as well as our closely linked real-estate tax policies that favor urban sprawl) are preventing us from finding out if railroads really are cheaper."

Let's see ... total U.S. logisitcs costs went from 16% of GDP in 1980 to 8.5% of GDP in 2003. So, if truck taxes triple and the number of team tracks quadruples ... who knows what the number may be in 2010 ... 16%?


Mark, I certainly believe that U.S. railroads have a significant role to play in the economy, and that role may be somewhat prejudiced by public policy. But the fundamental logistic strengths of individual and shipment mobility in the form of auto, truck and plane, coupled with the "commons" benefit of joint passenger and freight usage of transport facilities make the U.S transport system unequalled in its support of a high standard of living.

The contrast with the European experience is illuminating. There, railroads have long been subsidized and trucks taxed far beyond anything that could be considered rational in the U.S.. To what end? Trucks totally dominate the freight market. Personal mobility? Highly subsidized passenger trains, yet the auto proliferates in the face of highly-taxed fuel. And in the wake of some dergulation, Southwest Airlines is widely emulated, to the delight of European flyers.

Sure, let's continue to seek a level public policy playing field, but let's not close our eyes to economic, competitive and logistics realities.

[Anonymous]

I think what Mark said was valid. He said either give support (not necessarily subsidy) to all OR to none.

LC

[joesap1]

I apologize guys and gals, I hit the wrong button and this post was posted before I typed anything.

Hemphill's latest poses the question as to whether the railroads should get/take any subsidy from the government? The answer is NO!!! Unless you are of the persuasion that you think the government does best.
Of which case I think you would like the V.A.T.(value added tax) that is added to everything in Great Britain and Canada. That 17.5% tax pays for their "free" health care program that stinks.
We don't want the railroads to get into any deeper clutches of the government, do we? Amtrak is already subsidized and they can not live without it. That is what usually happens. Once you start depending on outside sources for support, you lose your creativity at learning to live within your means and seeking to get money honestly.
What do you think?