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Stimulus and high speed rail?
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<P mce_keep="true">The Interstate Highway System (IHS) was built in response to a market demand by motorists (personal and commercial) for a better highway system. They lobbied Congress to make it happen. The game plan was for the government to provide enabler funds to jump start the building, which they did under the ruse of building a defense highway system, but ultimately it would be paid for by the users through fuel taxes, which is what has happened. </P> <P mce_keep="true">Until 1999, the Highway Trust Fund (HTF) ran a surplus, except for the building years. From 1999 to 2007 it had to draw down the surplus to continue to fund the highways, primarily because Congress would not raise the fuel taxes. In 2007 the U.S. government had to transfer approximately $3.4 billion from the general fund to the HTF, and in 2008 it transferred approximately $8 billion. </P> <P mce_keep="true">Transferring monies from the general fund to the HTF means that the motorists who pay federal income taxes are still paying for the highways, although using general funds tends to shift the burden from lower income motorists to higher income motorists. Thus, lower income motorists are not paying the same amount per vehicle mile as upper income motorists to use the federal highways.</P> <P mce_keep="true">Commercial users of the Interstate Highway System, e.g. truckers, bus companies, etc. must cover their costs, including fuel taxes as well as earn a profit, or they go out of business. Most of them pay higher fuel taxes than non-commercial users. They pay federal income taxes on their profits, and the federal government earns a return on the highways. Because the IHS has allowed freight carriers, as well as bus companies, to operate more efficiently, they have earned higher profits, and they have therefore paid higher amounts to the federal government. So the government no only recoups the cost of the highways through the fuel taxes, it gets a payback through the higher taxes paid by more profitable commercial users. </P> <P mce_keep="true">Personal users do not earn a return on the investment in highways or any other public conveyance, but they supposedly pay for their proportional use of the system. </P> <P mce_keep="true">The same concept applies to the nation's railroads, airways, waterways, etc. In many instances they too were kick started by the federal government. In fact, the Army flew the mail during the earliest years of commercial aviation. That is how Charles Lindbergh got his start. Ultimately, the investment in the airways, waterways, etc. produced a return for the commercial users with the same impacts as described for the highways. </P> <P mce_keep="true">The biggest difference between railways and other transport rights-of-way is that the former are controlled by the operator, whilst the common air, water, etc. rights-of-way are controlled by the federal and statement governments. If we were starting over, I suspect a better system would be to have the rails built and owned by the government, with private operators marketing and running the trains.</P> <P>With the exception of the NEC, Amtrak cannot cover consistently its operating costs. Thus, even if the government funded the building of the rails ala the highways, airways, waterways, etc. or took them over, there is scant evidence that any operator could cover his or her operating expenses and earn a return for the investors. </P> <P>The notion that the operators of high speed rail will somehow be able to reverse this pattern is not supported by any hard evidence that I have seen. In fact, just the opposite is the case. Given the costs, which many people want to ignore, high speed rail would be a greater financial drain than the current system. It will be likely a perpetual drain on federal and state government resources. </P> <P> </P>
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