Posts Tagged ‘amtrak’

Justin Owen discusses mass transit

Recently, Tennessee Center for Policy Research President Justin Owen sat down with the Heartland Institute to discuss the problems with mass transit, including Nashville’s Music City Star. Listen to the entire podcast by clicking here.

December 7th, 2010 | Recent News

It's Time to Put the Brakes on Wasteful, Subsidized Passenger-Rail Systems

By Justin Owen

Plenty of people are clamoring to make Nashville the next stop aboard the Amtrak express. It’s important to take a step back from the platform and see Amtrak for what it is: the most ineffective, inefficient and wasteful boondoggle of the past 50 years.

Amtrak is a classic example of government trying to do something it has no business doing. If passenger rail were something people wanted and were willing to pay for, private companies would be laying track across America. But record levels of car ownership, and widely available commercial airfare and bus services, mean rail travel is rarely self-supporting.

In fact, taxpayer-funded rail subsidies cost taxpayers nearly $1.5 billion annually. In all, Amtrak has milked Americans for $30 billion since its creation in 1971, never once posting a profit. Why? Because rail travel is largely obsolete, and continual government bailouts have caused Amtrak to become unaccountable and inefficient.

Amtrak’s ticket prices rival the high cost of flying while often taking longer to make the trip than driving. For example, the 284-mile “Lincoln Service” between Memphis and St. Louis costs $80 and takes almost seven hours. Driving the same distance would take less than four hours, with gas costing roughly half the price.

Amtrak has no reason to become more competitive as long as the government continues to reward its incompetence with annual bailouts. Instead of finding cost-reducing service methods, the rail system’s administrators actually have an incentive to operate further in the red. After all, innovation and profits would mean a decline in government handouts.

Subsidies to Amtrak are far higher than even airlines, which receive a healthy portion of government subsidies themselves. As of 2002, commercial aviation received a subsidy of $5.87 per 1,000 passenger miles traveled. Amtrak received nearly $200 per passenger for the same distance.

Further, Amtrak subsidies come directly from your pocket, whether or not you ride. Most airline and road subsidies are funded by the user through gas and ticket taxes.

This corporate welfare must stop. Not only does it leave taxpayers with an unreasonable bill, it removes any incentive for Amtrak to operate in an effective and efficient manner.

Why would we encourage Amtrak to build more lines if it cannot even operate its current ones properly? In fact, given its record, we should put the brakes on the government-subsidized rail system altogether.

Stripping Amtrak of its governmental training wheels would be a major victory for taxpayers. Since that’s unlikely to happen anytime soon, Nashville should avoid adding to the taxpayer-financed train wreck that Amtrak has become.

July 8th, 2007 | Commentary

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