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[quote user="HarveyK400"] I don't understand the bond authority bit.  That sounds like a way to expense an investment - or am I wrong.  (Selling bonds has made many of the Mayor's family and friends rich in Chicago.  Does it work that way in Washington too?)[/quote]Granting Amtrak the authority to issue bonds means, in all probability, that the bonds will be backed by the U.S. Treasury, i.e. the taxpayers, in case of a default.  It also means that Amtrak will be able to borrow money at U.S. Treasury rates.  Amtrak issued bonds would probably attract a rate somewhere between the Treasury 10 year note and 30 year bond.  This means it will be able to borrow the money to build, repair, and maintain their infrastructure and equipment for a lower rate than their competitors, i.e. commercial airlines, bus companies, etc.  This is a government subsidy.Debt financing requires periodic payment of interest and principal.  The principal can be paid into a sinking fund, which is the typical pattern, so that the issuer has enough money to redeem the bonds on maturity, or it can be paid in a lump sum when the bonds are retired.  In this case the issuer might issue new bonds to pay for all or part of the bonds being retired.   Anytime a business or government or individual borrows money to buy goods and services, the cost of the acquisition increases by the amount of the debt (issuance) fees and the interest attracted by it.  If Amtrak issued $5 billion of 30 year bonds at 4.2 per cent, which is about half the difference between the U.S. Treasury 10 year note and 30 year bond rate, the cost of the acquisition and financing would be approximately $17.5 billion.  The cost of the debt would be amortized to expense each year for the life of the debt issue, i.e. 30 years.  This is what is meant by the term expensing the investment.  Issuing bonded debt usually requires the services of an investment banker to structure the debt offering and assist with its placement, i.e. selling the bonds.  For this service the banker is paid a fee.  The amount of the fee, which is usually stated as a per cent of the issuance ($1,000 per bond) may only be one tenth of one per cent.  For an issuance of $5 billion the fee would be $5 million.  This is one of the reasons that investment bankers don't drive Toyota Corollas.Selling bonds also requires the services of a bond attorney to make sure that the legal bases are covered.  Bond attorneys attract a handsome fee for their services, but they are usually modest compared to the investment banking fees.Unless the issuing authority (politician, government official, corporate executive, etc.) organizes a kickback scheme, which is illegal, they do not stand to gain from the issuance of bonded debt. The governing authorities pay very close attention to anything that smells illegal.  And the jail terms for doing so are stiff.
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