If Amtrak can’t Operate Profitably we have No Business Getting in the High-Speed Rail Business

Posted by PITHOCRATES - November 12th, 2011

Week in Review

Before we commit to high-speed rail we probably should figure how to make the less costly type of rail not lose money first (see Amtrak’s true costs by N.B., WASHINGTON, D.C. , posted 11/7/2011 on The Economist).

AMTRAK, America’s government-run passenger rail service, received $1.4 billion in taxpayer subsidies in 2011. Critics reckon that’s too much, and say that the company should either be self-sufficient or privatised. Some surveys suggest that the majority of Americans agree. But Amtrak’s defenders are striking back, arguing that the railroad actually receives fewer dollars per passenger mile (ppm) than highways.

Yes, but Amtrak sells tickets.  Our highways don’t.  Except for private toll roads.  But private toll roads are private.  And typically the government doesn’t subsidize them with federal money.

Airlines don’t receive subsidies like Amtrak does.  That’s because there is a demand that they can meet profitably.  Passenger rail just can’t do that.  Their costs are just too great.  Which is why Amtrak can’t survive without federal subsidies.

And if Amtrak can’t operate profitably we have no business getting in the high-speed rail business.



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