Subsidy and contract service are two different things. With a contract service one agrees to provide a service at an agreed to or contracted price. Period. A subsidy is where one who is providing the service receives additional funding to cover losses for instance. A contracted service should pay the cost of the service plus a small amount more; once contracted, that's the price; if contract price isn't enough then no contract, no service. This non profit is not going to provide a service then ask for subsidies. It will either provide the service and recoup from the fare box or contract to provide the service for an agency or railroad for that matter.
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.
The problems Amtrak corrdor intercity trains solve are hihgway and airport congestion and the inability to expand highways and airports without very disruptive landtaking that would result in continiued expense much greater than the rail subsidies.
The problems the long distance trains solve are access to most of the USA for hadicapped, wounded , and elderly, tieing th ecorridors into a national system, standby and emergency operation for disasters and airline shutdowns, providing for internal and overseas tourists.
Sam1 Amtrak is not an unfunded liability. At least not in the sense that Social Security, Medicare, Medicaid, military retirement, federal retirement, student loans, etc. are unfunded. Amtrak is funded annually. Whether it is adequate is another question.
Amtrak is not an unfunded liability. At least not in the sense that Social Security, Medicare, Medicaid, military retirement, federal retirement, student loans, etc. are unfunded.
Amtrak is funded annually. Whether it is adequate is another question.
Okay, you got me, It isn't an unfunded liability, it is funded and then not paid for.
The problem is that it cannot cover its costs out of the fare box and, therefore, it contributes to the national deficit, albeit a small percentage of the total. Nevertheless, as I noted, add up all the small amounts, each of which is driven by passionate constituents, and they come to more than half a trillion dollars. The debt is a dollar and cents problem. Just take a look at Europe. And then envision the same thing happening here in a few years.
The debt is a dollar and cents problem. Just take a look at Europe. And then envision the same thing happening here in a few years.
Europe's problems, such as they are have nothing to do with anything in the US, because the US has common currency AND common government.
But at the end of the day, whether by fiscal policy or monetary policy or a combination thereof, we the people will have to deal with it. And it will hits folks in the pocketbook one way or the other.
Since its inception Amtrak has run up accumulated losses of more than $28 billion. If this has not contributed to the debt, I must have missed something in my accounting, finance, and economics courses, all of which add up to more than 90 hours of study, as well as more than 40 years working for Fortune 250 corporations.
No, Amtrak has accumulated losses that the federal government has paid for by issuing debt instead of with revenues. The lack of tax revenue to pay for the funding the government authorized is what caused the debt, not Amtrak. Amtrak can only spend what it's been given.
Sam1 schlimm: Non-governmental, non-profit corporations operate very successfully in the field of hospitals and healthcare, and they operate in an environment in which there are many for-profit and some government players. They end up being competitive on price, provide a competitive, often superb service, and pay their staffs at or (usually) above the prevailing rate. They do not pay dividends or issue stock. The model works quite well. Why not consider it for a quasi-utility such as a National Rail Service? Their motivation for cost containment and excellence does not depend on profit, but it can work. But we are talking railroads or at least public transport companies. Case in point! Canada had a government owned railroad (Canadian National) and an investor owned railroad (Canadian Pacific) that operated over similar territories for years. Although not exactly alike, they were similar. For years the Canadian Pacific ran circles around the Canadian National. Then, low and behold, the Canadian government had a Thatcher moment. It spun off the Canadian National and privatized it. What has been the result? Today the Canadian National is one of the prime railroad players in North America, in large part because it was unshackled from government bureaucrats.
schlimm: Non-governmental, non-profit corporations operate very successfully in the field of hospitals and healthcare, and they operate in an environment in which there are many for-profit and some government players. They end up being competitive on price, provide a competitive, often superb service, and pay their staffs at or (usually) above the prevailing rate. They do not pay dividends or issue stock. The model works quite well. Why not consider it for a quasi-utility such as a National Rail Service? Their motivation for cost containment and excellence does not depend on profit, but it can work.
Non-governmental, non-profit corporations operate very successfully in the field of hospitals and healthcare, and they operate in an environment in which there are many for-profit and some government players. They end up being competitive on price, provide a competitive, often superb service, and pay their staffs at or (usually) above the prevailing rate. They do not pay dividends or issue stock. The model works quite well. Why not consider it for a quasi-utility such as a National Rail Service? Their motivation for cost containment and excellence does not depend on profit, but it can work.
But we are talking railroads or at least public transport companies. Case in point! Canada had a government owned railroad (Canadian National) and an investor owned railroad (Canadian Pacific) that operated over similar territories for years. Although not exactly alike, they were similar. For years the Canadian Pacific ran circles around the Canadian National. Then, low and behold, the Canadian government had a Thatcher moment. It spun off the Canadian National and privatized it. What has been the result? Today the Canadian National is one of the prime railroad players in North America, in large part because it was unshackled from government bureaucrats.
How is it that CN after being unshackled from the government was able to leapfrog CP while CP which never had the burden of being run by the government is currently considered the worst class 1 railroad out there. clearly the Canadian government was doing something right and handed off a very good system that has been exploited.
Again, I come back to a central question that no one wantsto address. What is it about intercity passenger rail that suggests that it should be a ward of the state, i.e. a government agency or a heavily subsidized non-profit? Why is it OK for the airlines to rise or fall on their ability to cover their costs or Greyhound to do the same, but we have to pour billions of dollars into subsidies for passenger rail? Like another participante in our forums, I wish it weren't so. But it is!
Again, I come back to a central question that no one wantsto address. What is it about intercity passenger rail that suggests that it should be a ward of the state, i.e. a government agency or a heavily subsidized non-profit? Why is it OK for the airlines to rise or fall on their ability to cover their costs or Greyhound to do the same, but we have to pour billions of dollars into subsidies for passenger rail?
Like another participante in our forums, I wish it weren't so. But it is!
Essential Air service isn't a subsidy?
Granted it's a much smaller outlay, but it is a subsidy none the less.And a subsidy which serves 100% the exact same purpose as interstate passenger trains.
Somebody tell me, does Greyhound pay the same level of taxes and fees for use of the highway system that interstate truckers do? I honestly don't know.
henry6 Sam, you are assuming it will be a heavily subsidized non profit but it probably won't be.
Sam, you are assuming it will be a heavily subsidized non profit but it probably won't be.
I did not say anything about non-profits as far as I can remember. Every regularly scheduled passenger railroad in the world, as far as I know, is subsidized in one way or another. There is no reason to believe that passenger rail in the United States could survive without subsidies irrespective of the form of ownership.
Nonprofits or not for profits are beset with many problems. They don't get a free pass. Again, no one has said why the United States should subsidize passenger rail to the extent that it does. The subsidies required for passenger rail are many times those afforded to commercial air and commercial highway users.
What is so scared about passenger rail that the country needs to prop it up, especially the long distance trains that serve a very small percentage of intercity travelers? And especially in light of the many other needs besetting the country?
I put out the idea of a nonprofit corporation because they work very well in some applications. I don't know if the concept would have any merit for a national passenger rail corp. My entire point is that there are other ways of doing things besides for-profit corps and government units that have a proven record of success. I would hope folks on this forum are open-minded enough to at least consider alternatives. sam with her 90 hours of coursework seemed to think nonprofits are only about subsidies. Ditto with the German Rail posting and environmental impacts. I posted,but predictably on cue Paul M. dismisses it because it differs from his bias toward hybrid cars like the Prius, and says that German Rail is basically reposting disinformation. Around here it seems that most have a siege mentality and engage in dichotomous thinking, so that any idea that differs from the same ol' same ol' is dismissed out of hand. Why even bother?
C&NW, CA&E, MILW, CGW and IC fan
schlimm There is no reason to think that all nonprofit corporations are subsidized or rely on donations, unless one has no knowledge about that topic...
There is no reason to think that all nonprofit corporations are subsidized or rely on donations, unless one has no knowledge about that topic...
We are talking specifically of passenger rail. Are you saying a non-profit replacement carrier would not need a subsidy, or as Henry6 calls it "payment for service" ?
There is no reason to think that all nonprofit corporations are subsidized or rely on donations, unless one has no knowledge about that topic.. In the case of hospitals (62% in the US are nonprofits) some are affiliated with a religious group, though most are not. Many are connected to, but not actually a part of prominent universities. In any case, they are not subsidized and most do not rely on donors. As henry wrote, the difference between gross revenues and gross costs and expenses is reinvested in the operation to upgrade and/or expand. The do not pay federal corporate income taxes (also true of some corporations) and are supposed to help their communities in various ways in return and limit executive salaries. Although some have questioned that, here is a link to a fairly recent IRS study:
http://www.irs.gov/pub/irs-tege/execsum_hospprojrept.pdf
Being non profit is not being a ward of any government; and it is not a charity case by any means. If it doesn't want the stirngs that come with any money, it can either renegotiate or walk away. It will have its own managers and own board of directors and doesn't have to nor should take direction from anyone. Sam, you are assuming it will be a heavily subsidized non profit but it probably won't be. It could be contracted with a government or agency to do something but that is not a subsidy, it is a payment for service. This is private enterprise. But this is a private enterprise which has decided that its excess money will go back into the company for maintenance or expansion for the sake of the company and not for the sake of stockholders or investment bankers.
Amtrak is funded annually. Whether it is adequate is another question. he problem is that it cannot cover its costs out of the fare box and, therefore, it contributes to the national deficit, albeit a small percentage of the total. Nevertheless, as I noted, add up all the small amounts, each of which is driven by passionate constituents, and they come to more than half a trillion dollars.
The debt is a dollar and cents problem. Just take a look at Europe. And then envision the same thing happening here in a few years. Solving the problem has political overtones. But at the end of the day, whether by fiscal policy or monetary policy or a combination thereof, we the people will have to deal with it. And it will hits folks in the pocketbook one way or the other.
All nations, including this one, have limits. To this extent the total spend matters. But for each item, i.e. the amount that should be spent on Amtrak, the total is irrelevant. The key question is what does society get back for the spend? What are the priorities or what should they be? Is Amtrak a priority investment that benefits the public good or are their higher priorities? Should those who favor passenger rail urge the users to pay for it or should they ask the taxpayers to support what the users will not pay for out of their pockets?
Venture capitalists and other investors invest when they see an opportunity to earn a reasonable return. If passenger rail presented them with the potential for a reasonable return, the money for it would be there in a heartbeat. Unfortunately, there is no return in passenger rail, at least not now in this country. So it is dependent on the taxpayers to prop it up. I hope the Italian experiment in private passenger rail shows us another way. Whether it will remains to be seen.
According to the U.S. 2010 Census, 14 per cent of Americans live in poverty. And 21 per cent of the nation's children suffer the same fate. These facts lead me to this question. Should we spend $3 billion a year (Amtrak's approximate 2011 operating subsidy and capital expenditures) on a national passenger rail system that is used by less than one per cent of intercity travelers or should we spend it on programs designed to help lift the poor, especially the children, out of poverty? Amtrak's annual subsidy, including the ARRA capital expenditures, would provide a lot of school lunches or training programs for people who need to be retrained for the jobs of the future or better said today's jobs.
schlimm Non-governmental, non-profit corporations operate very successfully in the field of hospitals and healthcare, and they operate in an environment in which there are many for-profit and some government players. They end up being competitive on price, provide a competitive, often superb service, and pay their staffs at or (usually) above the prevailing rate. They do not pay dividends or issue stock. The model works quite well. Why not consider it for a quasi-utility such as a National Rail Service? Their motivation for cost containment and excellence does not depend on profit, but it can work.
I think putting a non-profit in charge of passenger rail sounds like a good concept. My main question is who would provide oversight. Profit making corporations have boards and stockholders. Non-profits like hospitals are heavily regulated. Other non-profits like United Way rely on contributors who may with hold giving if they disapprove of the charity's actions. And non-profits are famously not immune to over priced CEOs and extravagant spending.
If this non-profit passenger agency received gov't subsidies, don't you think Congress would want to continue to micromanage as they have been doing for the last 40 years. This sounds like the quasi-public US Post Office which can't raise the price of a stamp a penny without an act of congress. We need more details of how this could work.
Thank you, Schlimm, for seeing how and why it might work as a non profit corporation. People misunderstand the difference in not for profit and not profit in legal terms. As a public utility or public service, it would not be out of line to consider such an operation/corporation. What is most important is to understand that any earnings, after expenses, have to be reapplied to the goal of the company for the good of the company. So, there would be no Bentley's for the head cheese nor trips with Harems to exotic islands, etc. just a fair comesatory package. Money earned above and beyond costs of operations would be used to either improve any given operation, buy new or renovate existing equipment or ifrastructure, offer additional or expanded services, keep fares as low as possible. But the important thing is to keep your eye on what you say you are doing: provideing passenger rail service(s) (not running trains).
I've worked for plenty of companies that had no interest in doing things better. Only faster and cheaper. The notion that profit motive cures all ills is false. It is the best of a series of imperfect choices perhaps, but it is not itself perfect.
And I called it a canard, because as I said, Amtrak is only an unfunded liability insomuch as the Federal government refuses to raise taxes to cover it's expenditures. If the Federal government stopped doing that, then in fact Amtrak would not be contributing to the debt whether it was the most cost effective option or not. In fact, 12+ years ago when we were running fiscal surpluses, Amtrak did not contribute to the debt in any way.
In other words, Amtrak's portion of the federal debt is irrelevant to the discussion at hand, because the debt is a political problem, not an operational one.
Whether or not Amtrak in it's current form or Government funded rail services in any form can be revenue neutral or even profitable IS a valid question, but again is not the same as the current debt issues.
YoHo1975 Sam1: The United States federal debt stands at $15.2 trillion. .... This is a ridiculous canard.
Sam1: The United States federal debt stands at $15.2 trillion. ....
The United States federal debt stands at $15.2 trillion. ....
This is a ridiculous canard.
Ridiculous? Canard? Just the sort of words that encourage discussion of differing points of view.
No where have I said that Amtrak is a major driver of the budget. A line item read of the federal budget, which very few people do, shows that there are thousands of items that contribute to the deficit and debt. Amtrak is one of them, which is what I was trying to say in my previous post. Again, to a key point from that post. Pouring just a little bit more gasoline on a fire will not put it out.
If the nation's airlines and intercity bus companies are expected to earn a profit, why is intercity passenger rail any different? What is it about Amtrak that says the nation has to have it? It is not a utility in the sense that local transit is a utility. Perhaps in a few corridors intercity passenger rail is important for a free flowing transport system, but there are not many of them. Outside of those corridors it is a nice to have. The users should pay for the system.
Likening NASA to intercity passenger rail is mixing apples and oranges. NASA was founded to further space exploration. In part it was designed to make sure that the United States did not fall behind the Soviet Union, especially with respect to the defense implications of being in space. Had the United States, which was the other super power at the time, not committed to space, it could have been at a serious disadvantage vs. the Soviets. On the other hand, had intercity passenger rail gone away in 1971, with the possible exception of one or two corridors, there would have been practically no impact on the U.S. transport system.
A for profit company is driven to do things better, faster, cheaper, with the operative term being better. To get there it has to focus on its customers, employees, lenders, stockholders, etc. Drop the ball on any key stakeholder group, and it goes out of business. A government agency, which in many instances has employees as good as any found in the private sector, does not have this driver. Clearly, there are some things that are vital for the body politic, and they need to be provided on a societal needs basis. Amtrak is not one of them. It or its derivatives should be operated as a for profit business. Or be allowed to die.
Stealing this link from the thread on moving the SW Chief
http://www.transportation.northwestern.edu/docs/2012/Iowa%20Pacific%20Sandhouse%20Gang%20presentation.pdf
I checked the pricing on their new york operation. It is price competitve though perhaps more expensive than driving. Dove tails into what I was suggesting. Let private companies develop their markets as they see fit along side government agencies.
henry6 Ok..we're moving forward....we are not Amtrak...we are NEWPASS, lets say, for New Passenger Service. We are definining ourselves to own and operate rail passenger services (note, I said, services and not trains) and, unlke our predecessor we are not beholding to any political entities or politicians nor is our gaol to relieve private enterprise freight railroads of the burden of running passenger trains. Should we be a private for profit or private non profit corporation?
Ok..we're moving forward....we are not Amtrak...we are NEWPASS, lets say, for New Passenger Service. We are definining ourselves to own and operate rail passenger services (note, I said, services and not trains) and, unlke our predecessor we are not beholding to any political entities or politicians nor is our gaol to relieve private enterprise freight railroads of the burden of running passenger trains. Should we be a private for profit or private non profit corporation?
I see 3 separate organizations none of which would in my mind be "for profit." I don't see why they would have to be for profit.
Organization 1 is an operations and consulting group. Their role is to be the "bidder of last resort" for passenger rail operations of all sorts. They are also a consultant on any intercity passenger rail projects corridor or otherwise. Think of this group as being the part of Amtrak that currently is Amtrak California. They operate the trains, they help define the system, but the system itself is it's own entity.
This group may also provide and support a universal ticketing system.
This organization likely receives a small grant from the federal government for it's core operations and for the afformentioned ticketing system, but it is in general supported through it's consulting and operating contracts with the host systems.
Organization 2 is the NEC. It is an intergovernmental agency supported by the states/commuter agencies that the NEC runs in, the Federal Government and the Freight railroads that access the track. It's purpose is to operate the NEC. I think of this agency as being like Cablelabs. I assume none of you know what that is, but it's a non-profit organization that sets industry wide standards and does industry wide research. This organization is funded by Intercity train fairs and payments up from the states/local commuter agencies and freight railroads. This group would contract out operations to either the first organization or another provider. Their job is just to be over the entire system.
Organization 3 is a full on Federal government agency. Their job is to maintain long distance passenger rail on freight tracks that is considered vital to the national interests of the country. This agency would not be expected to turn a profit, but would rather be expected to provide a needed service at a competitive rate with cost differences being fully absorbed by the Federal government.
Organization 3 is of course a big money loser, but again, it is a vital interest to the nation and so it must go on. How routes are chosen, added, removed is of course an issue of politics. Presumably, in cases where the intercity service augments corridor service, then crossfunding may apply.
In general, I expect Federal funding to be converted to something similar to the Highway fund or even the way HSR funds have been awarded. There is a bucket of federal money to assist in the development of these transportation corridors that is distributed through some formula and it is up to the states to use it or not.
I see these 3 organizations as far leaner, and more focused on specific goals. I see organization 1 as being a sort of glue. It may be that they are in charge of say large servicing facilities like Beech Grove. A service they then contract out to the various corridor services. Perhaps the lease the rolling stock back to Org 3 and other agencies. Perhaps they own the non-NEC Amtrak assets like stations and collect rent.
The NEC agency is I think self explanitory as is the runt of Amtrak that I define as Org 3.
In this scenario, a state or group of states or private entity wants to define a corridor service. They likely would contact Organization 1 to do consulting work on new service for which they are paid. This new corridor service is approved by the local voters or in a for profit instance, the owners of the rail agree to the lease, all i's are dotted and T's crossed, then operations are bid on. Org 1. must bid on the service at a rate that would sustain the service. They may not be the lowest, but if no one else bids, they must. It is of course up to the corridor operator if that bid is sustainable. In either case, Org 1. would provide integrated ticketing services for this corridor to connect it to the national network. For which it is paid some fee.
In this way it is up to each individual corridor agency to define how it might be paid for. for profit, government supported, whatever. NewPass1 only concerns itself with providing a set of defined services at defined costs.
What an excellent post.
Paul Milenkovic I am not, perhaps persuaded by the argument of a large national debt being a reason not to subsidize Amtrak. The big 4 in Federal spending are healthcare, defense, Social Security, and interest payments, and "discretionary spending" is a minority slice of the pie. Of that discretionary spending, a goodly amount goes to things that the Federal government has to have, say, funding the IRS so taxes get collected in a fair and orderly manner, so the amount of Federal money perhaps spent on various social concerns with intangible economic benefit, Amtrak, the Space Shuttle, etc., is of lesser importance. But on the other hand, there is the famous saying from the one-time Senator from Illinois, "a billion dollars here, a billion dollars there, and pretty soon it adds up to real money." To the extent that we have a national debt concern, the 1 billion+/year on Amtrak doesn't amount to anything, but there are many competing social concerns with intangible economic benefit that "a billion dollars here, a billion dollars there", well, one gets the idea. If Amtrak is a technological product (i.e. trains, and improved trains to achieve somewhat higher speeds if not quite yet full HSR) with diffuse, intangible, and difficult-to-quantify economic and social benefit, so is NASA. I once suggested this to a brick-and-morter advocacy colleague that passenger train advocates could look to see on what is going on with the space exploration advocacy community. My colleague bristled with the suggestion that Amtrak be compared to NASA because NASA was a (supported by then Republican Congressional leader Tom DeLay) boondoggle getting 10 times the funding of Amtrak, an underfunded and worthy cause. Well, one person's boondoggle is another person's socially vital enterprise with intangible and unquantifiable benefit. But were my colleague to take off his politically partisan goggles, perhaps he could see that NASA and Amtrak are much the same thing: the government taking on activities that the free-enterprise system cannot or will not do, each having a dedicated advocacy community among "civilians" not involved in the day-to-day operations of these agencies or quasi-corporations, each having "anti's" who think that NASA is a big fat waste of money and those who think the same about Amtrak, and so on. But to pursue the NASA analogy, one can be "for" having human space exploration for all the miriad of unquantifiable and intangible societal benefits (inspiring kids into careers in math, science, and engineering, the putative spin-offs of space tech into civilian life, satisfying the human desire to investigate the unknown and develop a new frontier, high-tech jobs to provide employment, possible resource exploitation -- solar beaming satellites, asteroid mining, disposal of atomic waste), one can be for all of those things and still think that the Space Shuttle was a particularly expensive way to do all of this. It is possible to be critical of the Shuttle in the space advocacy community without being regarded as "anti-space." It is tolerated to heap criticism on the Shuttle without having a workable alternative in hand. It is tolerated to countenance private or public-private partnerships such as Elon Musks efforts without being beaten down with "Space exploration has always required the government and always will." The overall passenger advocacy community, it seems, has a narrower view of what one has to be for and what one has to be against. The local brick-and-morter advocacy group is representative in having a particularly narrow point of view in this regard. This forum has a much broader set of views represented, although there is a core group in this forum that takes the standard NARP line and regards commentators deviating from that orthodoxy as being on the fringes. Hence the amount of heat and debate generated by posting "A Possible End to Amtrak." In the brick and morter advocacy group we wouldn't even have this discussion because someone would have ushered one out of the room before it got that far.
I am not, perhaps persuaded by the argument of a large national debt being a reason not to subsidize Amtrak. The big 4 in Federal spending are healthcare, defense, Social Security, and interest payments, and "discretionary spending" is a minority slice of the pie. Of that discretionary spending, a goodly amount goes to things that the Federal government has to have, say, funding the IRS so taxes get collected in a fair and orderly manner, so the amount of Federal money perhaps spent on various social concerns with intangible economic benefit, Amtrak, the Space Shuttle, etc., is of lesser importance.
But on the other hand, there is the famous saying from the one-time Senator from Illinois, "a billion dollars here, a billion dollars there, and pretty soon it adds up to real money." To the extent that we have a national debt concern, the 1 billion+/year on Amtrak doesn't amount to anything, but there are many competing social concerns with intangible economic benefit that "a billion dollars here, a billion dollars there", well, one gets the idea.
If Amtrak is a technological product (i.e. trains, and improved trains to achieve somewhat higher speeds if not quite yet full HSR) with diffuse, intangible, and difficult-to-quantify economic and social benefit, so is NASA. I once suggested this to a brick-and-morter advocacy colleague that passenger train advocates could look to see on what is going on with the space exploration advocacy community. My colleague bristled with the suggestion that Amtrak be compared to NASA because NASA was a (supported by then Republican Congressional leader Tom DeLay) boondoggle getting 10 times the funding of Amtrak, an underfunded and worthy cause.
Well, one person's boondoggle is another person's socially vital enterprise with intangible and unquantifiable benefit. But were my colleague to take off his politically partisan goggles, perhaps he could see that NASA and Amtrak are much the same thing: the government taking on activities that the free-enterprise system cannot or will not do, each having a dedicated advocacy community among "civilians" not involved in the day-to-day operations of these agencies or quasi-corporations, each having "anti's" who think that NASA is a big fat waste of money and those who think the same about Amtrak, and so on.
But to pursue the NASA analogy, one can be "for" having human space exploration for all the miriad of unquantifiable and intangible societal benefits (inspiring kids into careers in math, science, and engineering, the putative spin-offs of space tech into civilian life, satisfying the human desire to investigate the unknown and develop a new frontier, high-tech jobs to provide employment, possible resource exploitation -- solar beaming satellites, asteroid mining, disposal of atomic waste), one can be for all of those things and still think that the Space Shuttle was a particularly expensive way to do all of this.
It is possible to be critical of the Shuttle in the space advocacy community without being regarded as "anti-space." It is tolerated to heap criticism on the Shuttle without having a workable alternative in hand. It is tolerated to countenance private or public-private partnerships such as Elon Musks efforts without being beaten down with "Space exploration has always required the government and always will."
The overall passenger advocacy community, it seems, has a narrower view of what one has to be for and what one has to be against. The local brick-and-morter advocacy group is representative in having a particularly narrow point of view in this regard. This forum has a much broader set of views represented, although there is a core group in this forum that takes the standard NARP line and regards commentators deviating from that orthodoxy as being on the fringes. Hence the amount of heat and debate generated by posting "A Possible End to Amtrak." In the brick and morter advocacy group we wouldn't even have this discussion because someone would have ushered one out of the room before it got that far.
Sam1 The United States federal debt stands at $15.2 trillion. ....
This is a ridiculous canard. It isn't Amtrak, or passenger rail's fault that the US Government likes to fund things and then not raise the revenue to pay for them. The most recent example being deciding have 2 wars and then cutting taxes at the same time. A completely insane thing to do.
Of course if the Government aka the people don't want to pay for Amtrak, then Amtrak should not exist. We have a debt problem, because of situations like that, but at the same time, if we do want Amtrak, then the government ought to raise the revenues to pay for it. To do anything else is to be irresponsible.
As for the specific value of intercity trains and arbitrary cutoffs. I agree, there should be more, not fewer intercity trains. Your "should serve every community of 25,000 or more" is pretty meaningless and of course impossible not just from a fiduciary perspective. But whether or not there should be more trains if they serve a vital need does not impact whether existing trains serve a vital need. They clearly do as evidence by at least one poster on this thread.
PNWRMNM Henry, You have to organize as a "for profit" corporation since you will fail the legal requirements to be a "nonprofit". Mac
Henry,
You have to organize as a "for profit" corporation since you will fail the legal requirements to be a "nonprofit".
Mac
I'm not sure Mac. If we are to claim to be operating as providing a service to the public which is also or can also be provided by government agencies, we just might try it to get certain tax benefits and open to grants, loans, and bonding priviliges not afforded a for profit corporation. Our aim is not to run trains, kow tow to politicians or stockholders. We can pay our staff and employees a given standard wage competitive with industry or government but instead of paying stockholders and investment bankers, we would put any "excess" money back into the operation in form of equpment and/or property to serve our purpose. We hear the terms for profit and non profit thrown around in political parlance but do we really understand the difference and the opportunities each gives and each takes away?
Indeed, the big four are the major drivers of the federal debt. Having said that, however, a line item analysis of the federal budget, which I perform each year for an interest group that I participate in at the University of Texas, shows that the small stuff, much of which is discretionary, adds up.
Last year I went through the CBO's analysis of items it believed could be cut from the federal budget or reduced significantly without having a deleterious impact on the well being of society. Of course, the CBO's definition of impact is as subjective as yours or mine. Nevertheless, I came up with more than $590 billion, ranging from $93 billion just by cutting improper payments, i.e. errors to fraud, as per the GAO, to $1 million in subsidies for cotton seed storage.
No one item is driving the federal budget and deficits. But every little bit of unfunded activity, including the subsidies to Amtrak, adds to the problem. Just a little more gasoline will not put out a fire.
henry6 Most everyone here is condmening Amtrak as it is or supporting certain parts of it or complaining about government operation and wants to privatize it. I have posted the idea of starting a new rail passenger company and asked for definitions and input FORGETING THAT AMTRAK EXISTS. But no one has addressed any of my questions or comments. Do we want to talk about replacing Amtrak with something else or do we just want to complain about Amtrak as it sits in its tracks?
Most everyone here is condmening Amtrak as it is or supporting certain parts of it or complaining about government operation and wants to privatize it. I have posted the idea of starting a new rail passenger company and asked for definitions and input FORGETING THAT AMTRAK EXISTS. But no one has addressed any of my questions or comments. Do we want to talk about replacing Amtrak with something else or do we just want to complain about Amtrak as it sits in its tracks?
I would scrap Amtrak. I would invite private businesses to bid on operating trains in those corridors where passenger rail made some sense. I would provide transitional subsidies, as well as performance operating subsidies, as long as other modes of transport are subsidized, where it made sense to do so, which in my mind is in relatively short, high density corridors where the cost of expanding the highways and airways is prohibitive.
If someone wanted to have a go at running long distance trains as a tourist service, I would encourage them to go for it. But I would not subsidize it. If Kansas taxpayers wanted to subsidize a train from Kansas City to Garden City, as an example, they could do it, but I would not place the burden on the national taxpayers.
Where the rails are owned by Amtrak, I would solicit bids for an independent operator to manage the rights-of-way and separate operators to run the trains. Anyone who could meet the required performance and safety standards could run a train on the independently owned rights-of-way.
To the extent that it is needed, I would have an independent manage a reservation system to help ensure coordination between the corridors. Travelocity might be a good reservations manager. They have the facilities and the competitive business spirit to do so.
The DOT would be the primary regulator. Proper regulation, contrary to what some folks have said about this Texan's perspective on regulation, is necessary. It would also be responsible for ensuring planning for future rail corridors, operational coordination, performance evaluation, etc.
This just skims the surface of the issue, of course. A lengthy paper would be necessary for each critical aspect of a plan to unwind Amtrak in favor of private operators. It could be done if the political will to do so were to come forth. However, as I have said, don't count on it. Too many people have a vested interest in the existing arrangement. Overcoming their resistance would require a concerted effort.
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
The United States federal debt stands at $15.2 trillion. Add another $3.7 trillion for state and local debt, and the debt burden, which one way or the other must be paid for by the people, is approximately $18.9 trillion. This is more than the GDP. And this is before considering unfunded liabilities. Add in the latest estimate for these liabilities and the total comes to approximately $65.9 trillion. How did we get to this point?
Many complex factors have loaded the U.S. with its current debt burden. One of them is the argument by numerous interest groups, including passenger rail supporters, that their cause is not bounded by economic constraints. The benefit to society is so great, so they argue, that the nation has to have it irrespective of the cost and whether the users will pay for it. The argument is not the exclusive prerogative of passenger rail supporters. Sport teams, symphony orchestras, you name it, all claim that their activity adds immeasurable value, beyond what their patrons are willing to pay, and therefore they need to be supported by the taxpayer.
If Amtrak's long distance trains meet a vital national need, then they should serve every community in the United States with a population of more than 25,000, which is admittedly an arbitrary cutoff. Of course, this notion is unworkable. Just in Texas it would cost the taxpayers hundreds of millions of dollars a year to subsidize long distance trains that very few people in the Lone Star State would use.
All modes of transport receive some subsidy, although the amount of it depends in part on how one defines subsidy. At the end of the day it does not matter. The same argument applies to the hidden agendas of those who sponsored and oversaw the transition of what remained of intercity passenger rail to Amtrak. Whether they thought that it would succeed or fail or did not know does not matter. It is history.
The key question is where does passenger rail make sense? What problem does it solve? Is it the optimum solution? What problems will the solution create? Do people really want it? Will they pay for it? For my money, outside of a few relatively high density corridors, passenger rail does not make any sense. But it does make sense, within reason, in a few of its existing, as well as some potential future corridors.
Corridor train services do reduce traffic and airport congestion' otherwise they would not be corridors. The whole NE economny would suffer a blow if the NEC passenger service stopped running. Milwaukees economy would suffer slightly, but still suffer, if Hiawatha service ceased. Etc.
Again, long distance service is worth subsidizing because it (1) promotes internal and oversees tourism, (2) provides the elderly, handicapped, and wounded with access to most of the country that they otherwise could not access, (3) ties the corridors together into a national system, with advantages politcally and equpment-wise, (4) is emergency transportation for a Katrina or airline shutdown, and (5) preserves an important USA heritage.
Denver - Dallas? Again the wounded USmy vet who travels yearly from Alberquegeu to Dallas and back to visit his extended family -via Amtrak sleeper handicapped room and Chicago.
And highway transportation is subsidized even greater than Amtrak, even on a passenger-mile and ton-mile basis, IF YOU INCLUDE LAND USE.
The problem is that Amtrak's long distance trains provide a societal link that far out weighs any direct economic benefit.
One of the purposes of the government, Federal, State or Local is to do the things that don't make economic sense but that are to the benefit of society and are so governed by our laws. In the case of long distance passenger service, they provide a value to the small communities they serve that is intangible and invaluable. How will the people of LA be impacted by the loss of the Southwest chief or even the rerouting of the chief? Not that much, in fact most probably won't even read the article about it in the paper. How will the people of La Juanta Colorado be impacted? Every man woman and child in town will likely notice a change small or large.
And this is ultimately the problem with the discussion of Amtrak, it boils down to a question of economic viability, but part of the point of government is to do the things that need doing but that wouldn't be done otherwise.
As for budgets. I don't think upping Amtrak's budget indiscriminately would fix the problems, but I do believe that they would be far more successful if congress matched Amtrak's stated operational goals with a budget that could even begin to cover those goals.
Obviously, that's all politics and not much to talk about, but the practical issue is that Amtrak has a stated requirement for operations and is not given the budget or anything like the budget they need to meet those goals.
And then people wonder why they fail...
Personally, I think given the political realities Amtrak has faced since the beginning, they should and could be considered a success.
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