You would think that we would have learned that fiscal austerity lesson in 1937.
Dave
Lackawanna Route of the Phoebe Snow
Phoebe Vet You would think that we would have learned that fiscal austerity lesson in 1937.
Phoebe: How many people even know what you are talking about? Although I do even the older persons around here have forgotten. Persons on this thread have stated that doing something over and over is schizod but that 1937 lesson has not been learned.
So lets see if I have the correct picture. If I believe that the best way forward for Amtrak or passenger trains in the United States is to emphasize relatively short, high density corridors, where there is a probability of being able to cover the trains operating costs, in lieu of supporting money losing long distance trains, I am a heretic. Is that correct?
Well said, Sam1. Save me a seat on the Heretic Express.
Sam, you got it: the American "C(G?)reed is if it can be done and I will make money, then do it. If it can be done but I can't make money, then it shouldn't be done even if everybody will benefit."
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
"Corporations don't pay any income tax. They just pass it on."
Yet another of the pieces of dis-information passed on by our right wing friends so frequently that it may become a settled truth, as in The Big Lie technique. If what sam1 said had even a shred of truth, shareholders would be complaining to the corporations about why they are wasting huge sums of money for lobbyists and accountants to try to get/keep/find tax breaks, depletion allowances, special credits, offsets, etc. from state and federal legislatures.
sam1 is so inconsistent. (S)he disses the writer of the article cited by Phoebe ("Who is ...?") yet says not a word about the writer of the Globe article, who was totally discredited in the GHW Bush administration.
C&NW, CA&E, MILW, CGW and IC fan
schlimm "Corporations don't pay any income tax. They just pass it on." Yet another of the pieces of dis-information passed on....
Yet another of the pieces of dis-information passed on....
What is the source of corporations' income on which they would pay tax? The product that they sell to their customers. If a tax is levied on their income, are the stockholders happy that the profits of the corporation are reduced? To attempt to keep the stockholders happy, the corporation calculates how much must be added to the price of the product to compensate for the expense of the tax. To me, this is simple economics.
I have no idea as to how the cost of attempting to reduce taxes compares with what the taxes would be if no such attempt were made. Does anyone else contributing to this thread know?
Johnny
Thank you DickH
But if a tax is determined as a percentage of income or price of product, then the higher the income or cost of product means the higher the tax figure Thus increasing price of product to cover cost of tax is self defeating! Or am I missing something?
Henry,
All you are missing is the rational business man shipping the jobs to make the thing to China or Mexico and then having the politicans blaming the evil greedy investor for wanting a return on his money and increasing the taxes to pay unemployment and calling it a jobs bill.
Mac
I guess so. Then what we've been told is a recession is what I thought it was all along: an implosion of a house of cards set up by the financial community and is designed to fail under its own weight and pressures. The problem is that those of us without money get hurt the most in loss of services and monies due while those with money get government rewards so they can start blowing up the bubble all over again!
NKP guy I ride Amtrak long distance trains just about whenever I travel and I don't appreciate being told they "are not a serious transport option." They certainly are to me and many thousands of others! Sam1, your concern for the deficit is touching. But how does that square with the thousands of Amtrak employees who would be thrown out of work if the long distance trains would be dropped? How much would their unemployment cost taxpayers in many ways? The equipment would need to be sold off, the real estate, too, and for what good purpose? How would this help the USA in a time of recession? What miserably small amount of money would be saved, at the price of permanently destroying a travel option that has taken forty years to build and that the public, by every measure, wants and needs? With Amtrak destroyed (see my earlier comment about the lack of any future support for Amtrak if the long distance trains are axed), and airlines increasingly abandoning small-town America, just how would this serve our nation? It saddens me beyond words to see so-called railfans wanting to destroy long distance passenger trains because they believe they "are not a serious transport option." Tell that to the customers who have to buy their tickets 6 or 8 months ahead of travel in order to get a seat or room. Want to save the real federal government some real money? How about ending the farm subsidies or corporate tax breaks which cost taxpayers infinitely more than Amtrak's pathetic subsidy? Are you in favor of that? Or just killing my and the public's remaining interest in trains?
I have to agree with this - I don't travel by plane anymore, the TSA and 'security theatre' crowd has made it much too painful unless I want to pony up for charter flights or purchase my own aircraft. I drive, but sometimes that's just not practical for long distances - and can really be joyless if you have to drive really long hours and deal with traffic in large population centers.
It's become popular to adopt the 'it doesn't benefit me, so it benefits no one' attitude, locked in step with the 'everything has to be self-sustaining and profitable to do it' belief. Public services, by their nature, are not profit-makers - but are offered to make modern life easier, and larger population concentrations possible. We can't keep building more and more highways, we can't make everyone either drive or use an aircraft.
Amtrak's portion of the federal budget (if I remember right) amounts to a 'marginal error of rounding' in terms of the size in comparison to the entire budget. Of course it's wise to look at your processes, see if they can be made more efficient, trim things that are pure waste; but you can't run everything like a business; and some things really shouldn't never be.
Removing the long distance routes from Amtrak makes it a glorified transit train for the Northeastern Corridor - that's all the trains that would be left. There would be no incentive for any states not serviced by that area to pay for it - and Amtrak would perish shortly thereafter. Granted, you'd see some private players step up and cherry-pick over the good routes, but anyone else outside their 'service area' would just be fscked - to put it bluntly.
I imagine that if we were to look into making Amtrak profitable, we'd see a lot of federal mandates that have them literally 'chained to an anchor'. They can't be profitable, they can't even break even - their legacy committments are just too many. If we accept that they are a public service, and that for that service - we have a certain amount of financial responsibility for it's continued availability to ALL; we could find it easier to handle its costs.
For my part in this, it's BECAUSE of Amtrak that I have an interest in trains - and it fuels my desire to participate in model railroading. To see it die, and take the last vestiges of passenger rail transit with it would most likely see the end of model railroading for a sizable portion of the hobbies population, myself included. Transit light-rail and monorails at the zoo aren't enough to keep it alive for me.
Deggesty schlimm: "Corporations don't pay any income tax. They just pass it on." Yet another of the pieces of dis-information passed on.... First, I hope that this thread does not degenerate into a political discussion. What is the source of corporations' income on which they would pay tax? The product that they sell to their customers. If a tax is levied on their income, are the stockholders happy that the profits of the corporation are reduced? To attempt to keep the stockholders happy, the corporation calculates how much must be added to the price of the product to compensate for the expense of the tax. To me, this is simple economics. I have no idea as to how the cost of attempting to reduce taxes compares with what the taxes would be if no such attempt were made. Does anyone else contributing to this thread know?
schlimm: "Corporations don't pay any income tax. They just pass it on." Yet another of the pieces of dis-information passed on....
First, I hope that this thread does not degenerate into a political discussion.
1. The initial comments about corporate taxes were very political.
2. If every cost or expense can be merely added onto the price of products, I guess that means you don't believe in the free market to determine prices.
henry6 But if a tax is determined as a percentage of income or price of product, then the higher the income or cost of product means the higher the tax figure Thus increasing price of product to cover cost of tax is self defeating! Or am I missing something?
Whether a business tax can be passed on to the consumer in the price of the goods and services depends on the elasticity of the demand/price curve. Most business organizations, of which a corporation is just one form, first attempt to pass their tax burden on to their customers. If the market is highly competitive, they may not be able to pass some or all of the tax on to their customers, in which case some or all of it may be passed through to the shareholders or as some studies suggest, to labor.
Frankly, in previous posts, I have outlined in general terms the features of corporate taxation and the economics of taxation. Clearly, doing so was a mistake. Many of the people who post to this or other threads don't understand either.
How corporate taxes function is not political. Deciding who pays the taxes, at what rates, and on what basis, is a political decision. I have never dealt with this issue. I have simply tried to point out, when the issues is raised by someone else, that corporations don't pay taxes.
Unlike defense or education or internal security, Amtrak is a commercial enterprise. It was expected to function as a business and as such pay its way.
If Amtrak, which is an intercity carrier, is a public service, then so too are the airlines, intercity bus companies, etc. They are not. They are commercial businesses that are expected to cover their costs and provide a return to their shareholders. When they fail to do so, as heaps of them have, they go out of business.
Several people who post to these forums claim that the sponsors of Amtrak designed it to fail. To know that they would have to have access to the minds of the individuals involved. Which means they would need access to the individuals thoughts, which could only be captured by a personal interview or on written documents, i.e. diaries, letters, Congressional Record, etc. No one to my knowledge has produced evidence of these intentions.
Amtrak's budget is indeed a rounding error compared to the federal budget. But that is a poor benchmark. Amtrak's competitors are expected to cover their costs. Why should intercity passenger rail be off the hook? What makes it so different? Moreover, what the government spends on other activities is irrelevant to what it should devote to intercity passenger rail.
Rounding errors have a way of compounding. Amtrak has lost an average of $56.6 million a month since its start-up in 1971. Using the average 10 year Treasury Note interest rate, which is the best indicator of the cost of public funds, had the money that has been lost by Amtrak been invested in Treasury notes, it would be worth $133.7 billion today. And that, amongst other things, would have bought a lot of school lunches.
But Sam, Amtrak is not a private business and cannot operate as a private business as long as Congress keeps things the way they are. If they would set it up as they did Conrail, allow it to make decisions and investments in property, equipment and operations as a business things would be different and you might be able to compare it to a private airline or bus company. But Congress keeps a strangle hold on Amtrak, its finances and it's decision making process, so that it cannot be judged as a company but as another piece of Legislation which is controlled by politics and not sound application of operations and business. As for school lunches....what passenger service can do for an economy just might have bought a lot of lunches for school kids and the whole town, too. Why keep removing passenger trains from the mainstream economy when it can be, and often is, a major part of it. Discussions about Amtrak are mere extensions of discussions about politics and are more often based on political pursuasion rather than real business or even real railroading..
Sam1 Several people who post to these forums claim that the sponsors of Amtrak designed it to fail. To know that they would have to have access to the minds of the individuals involved. Which means they would need access to the individuals thoughts, which could only be captured by a personal interview or on written documents, i.e. diaries, letters, Congressional Record, etc. No one to my knowledge has produced evidence of these intentions.
Loving, Jr., Rush (March 2009). "Trains formula for fixing Amtrak". Trains.
In that article, the author mentions that after Fortune magazine exposed the manufactured mismanagement in 1974, Louis W. Menk, chairman of the Burlington Northern Railroad remarked that the story was undermining the scheme to dismantle Amtrak.
If you can get hold of a copy of Fortune from 1974, check it out.
schlimm Sam1: Several people who post to these forums claim that the sponsors of Amtrak designed it to fail. To know that they would have to have access to the minds of the individuals involved. Which means they would need access to the individuals thoughts, which could only be captured by a personal interview or on written documents, i.e. diaries, letters, Congressional Record, etc. No one to my knowledge has produced evidence of these intentions. Loving, Jr., Rush (March 2009). "Trains formula for fixing Amtrak". Trains. In that article, the author mentions that after Fortune magazine exposed the manufactured mismanagement in 1974, Louis W. Menk, chairman of the Burlington Northern Railroad remarked that the story was undermining the scheme to dismantle Amtrak. If you can get hold of a copy of Fortune from 1974, check it out.
Sam1: Several people who post to these forums claim that the sponsors of Amtrak designed it to fail. To know that they would have to have access to the minds of the individuals involved. Which means they would need access to the individuals thoughts, which could only be captured by a personal interview or on written documents, i.e. diaries, letters, Congressional Record, etc. No one to my knowledge has produced evidence of these intentions.
Was Louis Menk part of the Nixon Administration that supported the formation of the National Railroad Passenger Corporation (NRPC). Was he a member of the Congressional committee that recommend the legislation that resulted in the formation of the NRPC? If he wasn't, how does he know that the key players formed the NRPC with the intent to have it fail and thereby kill intercity passenger rail in the U.S.?
The only people who would know whether the Nixon Administration formed the NRPC as a sham, with the express intent of killing it off, would be a member of the Nixon Administration or someone on the relevant Congressional committee who intended for NRPC to be a sham. And the only way one would know if that was their intent would be from interview notes or documents that revealed their mind set. It would be a challenge to get that information. If Mr. Menk was not part of the decision making processes, then his views would be hearsay. And if the matter was in court, his views would be dismissed.
Many Americans love a conspiracy. Forming Amtrak as a ruse to destroy intercity passenger rail is grist for their mill. However, there is little evidence to support the theory that Amtrak was formed with the intention to kill it off.
henry6 But Sam, Amtrak is not a private business and cannot operate as a private business as long as Congress keeps things the way they are. If they would set it up as they did Conrail, allow it to make decisions and investments in property, equipment and operations as a business things would be different and you might be able to compare it to a private airline or bus company. But Congress keeps a strangle hold on Amtrak, its finances and it's decision making process, so that it cannot be judged as a company but as another piece of Legislation which is controlled by politics and not sound application of operations and business. As for school lunches....what passenger service can do for an economy just might have bought a lot of lunches for school kids and the whole town, too. Why keep removing passenger trains from the mainstream economy when it can be, and often is, a major part of it. Discussions about Amtrak are mere extensions of discussions about politics and are more often based on political pursuasion rather than real business or even real railroading..
Much in all as I love to ride trains (i.e. just came back from a round trip on the Texas Eagle to Dallas), government should not run a commercial business. Amtrak is a commercial business, i.e. a quasi governmental organization similar to the U.S. Postal Service. It is a failed business, to be sure, but it is a commercial business. It competes with other commercial businesses, i.e. airlines, bus companies, etc.
Amtrak is saddled with excessive Congressional oversight. It is to be expected. Congressional authorization pays more than a third of Amtrak's costs. To believe that it will authorize the money for Amtrak and then take a hands off stance is not realistic.
The federal government is not in the airline business. It is not in the bus business or trucking business or barge business. It should not be in the railroad business. If the market for intercity passenger rail will not support it, it should be allowed to die. It should have been allowed to dies in 1971. You and I will never see eye to eye on what is and is not in the public interest or what is the proper role of government in commerce.
Obviously, many of the people who participate in these forums disagree with me. Some have wondered why I participate. In fact, a few have crudely suggested that I butt out. Well, here is the reason.
Drop the long distance trains and rationalize Amtrak. It probably could break even in a few high density, relatively short corridors. Moreover, as the population of the nation continues to grow, there will be more opportunities for passenger rail. I would like to see different competitors put it together on the bases of competitive bidding. And run it like a business.
If this is not sufficient controversy for you, here is some more. I would privatize Amtrak in a heartbeat. Then I would privatize air traffic control, the U.S. Postal Service, etc. And a few others. I would sell the airports to the highest bidder. And I would bid out the operation of commuter rail and local transit systems, with the understanding the government would subsidize them. All with the appropriate regulatory oversight. Sound unreasonable?
The Australians have done it, with the exception of Australia Post. As a result, they have one of the most dynamic economies in the world. Privatization is not the only reason. But it sure helped. And they are not the only ones. But a discussion of the dynamics of privatization is beyond the scope of these forums.
And Privatize the Interstate Highways and I am with you.
The California Zephyr has not run east of Denver for two or three weeks now, although I believe it is scheduled to resume shortly. It would be interesting to study what effect, if any, its absence has has on the communities along the line. Also, Amtrak was bussing Zephyr passengers to/from the Chief in Colorado, and I wonder what numbers chose that alternative.
The reason Menck would probably know is that he was head of one of the major players involved in the formation of Amtrak. If you honestly think that only members of Congress and the Nixon Administration had anything to do with the NRPC's beginnings, and that all of the decision process is on the public record, then you are ignorant of how Washington generally works.
Schlimm
Menk was then President of BN and had previously been Presidnt of Northern Pacific. He was never part of the Government. IIRC BN, like some other railroads got stock in ATK. Like all the others BN wrote the stock off as valuless.
I do not get the point of the claim that the Nixon Administration "designed ATK to fail" for a couple of reasons. First the thing is still here, having been funded by congress every year for 40 years. If the evil Nixon designed ATK to fail he did a poor job of it.
Second fact that no one seems to mention is that the railroads collectively were loosing 100s of millions of dollars per year running passenger trains that few rode. On ATK's first day they cut train miles by about 50%, clearly demonstrating that the US Govt was not going to waste quite as much money as it had been forcing the railroads to do.
Did Menk and/or Nixon and a lot of other folks that knew what was going on think that Congress would figure out at some future time that ATK was not an effective way to buy votes and quit funding it? Of that I have no doubt, but a shared conclustion based on publically available facts is not a conspiracy.
To restate by question clearly "What point do ATK advocates think they are advancing by claiming that Nixon, or Menk, or anybody else 'designed ATK to fail'"?
Mac McCilloch
schlimm The reason Menck would probably know is that he was head of one of the major players involved in the formation of Amtrak. If you honestly think that only members of Congress and the Nixon Administration had anything to do with the NRPC's beginnings, and that all of the decision process is on the public record, then you are ignorant of how Washington generally works.
What specific role did Menck play in the formation of Amtrak. And where did he write down his knowledge that Amtrak was formed with the intent of destroying it?
Lots of industry people were involved in recommending that the government take over the operation of the nation's intercity passenger trains. But they were not the decision makers. Menk may have believed that the enterprise would fail. Did he write that down or are his thoughts simply hearsay?
We are talking about history. Historians can only determine what people thought about a subject if they wrote it down, left an oral history, or it was incorporated into historical documents.
You just cannot help throwing barbs. And using inflammatory words like ignorant. What makes you think that you have an edge on how Washington works? I lived in Washington off and on for several years, whilst I worked in our company's D.C. government affairs office.
daveklepper And Privatize the Interstate Highways and I am with you.
The interstate highways system is infrastructure. It is not an operation. And in fact, although the federal government helps fund it, i.e. collects taxes and fees, the states oversea the building and maintenance of the roadways.
The users pay for the interstate highways. In fact, when considering the amount of federal taxes, as well as state taxes in some instances, that are transferred for other purposes, i.e. mass transit, deficit funding, education, etc., the users appear to have more than paid for it.
Today in many parts of the country segments of the interstate roadways are being built by private companies. Why? Because they are more efficient and effective, so say some, than the federal government.
Dakguy201 The California Zephyr has not run east of Denver for two or three weeks now, although I believe it is scheduled to resume shortly. It would be interesting to study what effect, if any, its absence has has on the communities along the line. Also, Amtrak was bussing Zephyr passengers to/from the Chief in Colorado, and I wonder what numbers chose that alternative.
In a few of instances it may have been a hardship. But not many. For most communities it would have had the same impact as the failure for a once a day long distance train to show-up in Abilene, Big Spring, Midland, Odessa, and Monahans. Oops, come to think of it, it has been decades since a passenger train stopped at any of those communities. And they are doing just fine.
Just think what would happen if the airlines went down for two or three weeks. Or the highways were closed for a similar period. It would be a major hardship. But few if any folks outside of train buffs would miss the shutdown of the long distance trains.
From what I've read, there were apparently two schools of thought in the Nixon admin. One was that of the DOT sec. Volpe who pushed hard for Amtrak and believed it would succeed (if it could shed some LD trains and add corridors) and the other was held by Nixon's staff. Apparently, Volpe pretty much carried the ball and persuaded Nixon to let him get legislation in place - over the objection of others (Ehrlichman & Schulz).
Some info here: http://www.trainweb.com/travel/stevelog/sg_tr_sw.htm (excerpt from Volpe bio)
I've never really seen anything written that Amtrak was "created to fail", although there is quite a bit of evidence that many thought there never should have been and Amtrak, that it was going to fail and that would be just fine.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
sam1: Instead of dismissing the validity of the notion that Amtrak was designed to fail based merely on what I said, go look at Rush Loving's article in the March 2009 Trains. I didn't make it up, only cited it, but as usual you devalue anyone who disputes your pronouncements based on one or another of your claims of expertise.
I never claimed I have any edge on how DC or government works. Your living in DC for several years gives you no special expertise either. But it is naive to believe that only congressmen and the Nixon Administration had input into the beginnings of Amtrak. Powerful interests and their lobbyists write much of the legislation passed by Congress. There have been volumes written on the topic, easily available at your library.
schlimm sam1: Instead of dismissing the validity of the notion that Amtrak was designed to fail based merely on what I said, go look at Rush Loving's article in the March 2009 Trains. I didn't make it up, only cited it, but as usual you devalue anyone who disputes your pronouncements based on one or another of your claims of expertise. I never claimed I have any edge on how DC or government works. Your living in DC for several years gives you no special expertise either. But it is naive to believe that only congressmen and the Nixon Administration had input into the beginnings of Amtrak. Powerful interests and their lobbyists write much of the legislation passed by Congress. There have been volumes written on the topic, easily available at your library.
I don't keep the back issues of Trains, and I don't plan to buy another copy to check Loving's article. Is Loving quoting from source documents or is he relying on others or what he has heard. Please cite the reference.
Here is a simple question. Does Loving have any documents from any of the Administration and Congressional decision makers involved in the start-up of Amtrak stating that it was their intention to destroy it or cause it to fail? This is different from saying that they thought the probability of its succeeding was low. The documents would include personal diaries, memos, reports, statements entered into the Congressional Record, taped interviews, video tapes, etc. If there are no documents, which I suspect is the case, then was Loving told by one of the key decision that it was his or her intention to destroy or help destroy Amtrak? Who were they? What was their role in the decision making processes? Otherwise, he is reporting hearsay or quoting some else who is relying on hearsay.
Do you have any prima facie evidence regarding the intent of the key Amtrak decision makers to destroy Amtrak or help ensure that it fails. Undoubtedly, there are hundreds if not thousands of articles by conspiracy theorists claiming that was the intent of the decision makers. Unfortunately, they have not provided any prima facie evidence to support their theory.
Lets see if I have you perspective right. If I disagree with you or anyone else, I am devaluing you or your point of view. And although I worked in our Washington, D.C. legislative affairs office on special occasions, I am naive regarding the national government. Is that about the size of it?
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