Amtrak—-A National Hazard At Any Speed

[planosteve]

This week’s tragic accident in Philadelphia should be a reminder. The real train wreck is Amtrak itself—–a colossal waste of taxpayer money and the very embodiment of what is wrong with state intervention in the free market economy. Worse still, the pork barrel politics which drive its handouts from Uncle Sam virtually guarantee that as time goes on Amtrak will become an increasing hazard to public safety, as well.

It seems like only yesterday, but one of my first assignments as a junior staffer on Capitol Hill was to analyze the enabling legislation that created Amtrak in the early 1970s. I was working for an old fashioned conservative Congressman and his first question was “how will it ever make a profit when we are running the trains from the Rayburn Building?”.

He couldn’t have been more clairvoyant. While it sponsors claimed Amtrak would be spewing black ink by 1974, the answer to my boss’ question was simple: never!

But you didn’t need to wait 43 years to prove it. There is not even a remote case that subsidizing intercity rail travel is a proper or necessary function of the state. Amtrak accounts for well less than 1% of intercity passenger miles. On every one of its 44 routes there are bus and air travel alternatives, and that is to say nothing of automobile travel —- in cars with drivers today or in the driverless kind tomorrow.

Moreover, the evidence overwhelmingly shows that passenger trains will never be economically competitive outside of a handful of densely populated corridors. By contrast, what was absolutely guaranteed from day one back in 1970 is that a government controlled passenger rail system crisscrossing the United States would become a monumental Congressional pork barrel—–an endless rebuke to rational economics.

And that it has. The cumulative taxpayer subsidy since 1972 totals more than $75 billion in dollars of today’s purchasing power. During the span of nearly a half century, Amtrak has operated upwards of 40 routes that have never, ever made even an “operating profit”.

Yet the operating profit test is itself a red herring. Like its aviation competitor, Amtrak is massively capital intensive. It maintains 21,000 miles of track, 100 rail stations, operates around 2,500 locomotives and passenger cars, and requires an extensive, costly infrastructure of communications and signaling systems, electric traction networks and a huge array of bridges, tunnels, switching yards, repair facilities, fencing and other right-of-way improvements and ancillary buildings. On a replacement basis, its entire capital asset base would easily amount to $50 billion (about $40 billion of track and infrastructure and $10 billion of rolling stock).

David Stockman

More at:
http://davidstockmanscontracorner.com/amtrak-a-national-hazard-at-any-speed/

[John in Plano]

Uncle Sam should sell Amtrak.

[Red Oak]

Just think of Obamacare as the Amtrak of health insurance, or vice versa.