Saturday, June 11, 2005

The National Railroad Passenger Corporation


When anyone ever brings up the subject of "the government knows better" or the wonders of socialized medicine I always answer with one word: Amtrak - officially known as the National Railroad Passenger Corporation.

This government funded mass transit program has been one of the biggest sinkholes of tax dollars in history. Today I read in the St. Louis Post that they can't even make money from the food and beverage service.

I am a simple guy - if you have a totally captive consumer base (that is, trapped inside a moving train) you have a monopoly on the food and beverages served. Since there is no competition, why not, say, double the price? Or triple? A six pack of beer is only $5 at the liquor store - retail. Amtrak's wholesale beer cost must be - lets say - .50 per can or bottle. Why not charge $4 each? Or $3? Nice margin, eh?

But if you read the article you will see that there is just one problem - Amtrak doesn't even know what they pay for the product! As a matter of fact, for every $1 they spend on food and beverage, they lose $2! Negative! With a monopoly! Only a government run program could actually lose money running a monopoly.

Of course, this is only the tip of the iceburg.

If you really want to get depressed, take a gander at this financial breakdown of the Amtrak routes with the on time percentage and the loss per passenger. Remember, this is from the federal governments website so it may actually be worse! Of particular note is the Sunset Limited route that loses a whopping $466 per passenger and arrives on time less than one out of twenty times!

From the CATO institute:

Amtrak makes a negligible contribution to the nation's transportation system.

Amtrak represents just .007 percent of all daily commuter work trips and just 0.4 percent of all passengers making intercity trips.

Amtrak's typical riders are not low-income Americans. Only 13 percent have incomes below $20,000.

Amtrak has virtually no impact on reducing traffic congestion, pollution, or energy use. Even a doubling of train ridership would reduce energy consumption and traffic congestion by less than 0.1 percent.

Amtrak is by far the most highly subsidized form of intercity transportation. The average taxpayer subsidy per Amtrak rider is $100, or 40 percent of the total per-passenger cost. On some of the long-distance routes, such as New York to Los Angeles, the taxpayer subsidy per passenger exceeds $1,000. It would be cheaper for taxpayers to close down expensive lines and purchase discount round-trip airfare (italics and bold mine) for all the Amtrak riders.

There are plenty of other examples, but you get the drift. Any program where profit is not an incentive is doomed. The employees and overseers of Amtrak simply don't care about turning a profit or how big their losses are because they have a seemingly endless supply of money to work with - my money and yours.

Take a moment to imagine what the government would do to your health care if it were socialized - if they can't run a railroad, as complex as that may be, how in the world could they run a health care system which is several orders of magnitude more complex than a railroad? I am not saying our health care system is perfect, rather saying the alternative of the government running the thing would be a farce at best and the biggest money sinkhole this side of the oil for food program.

Posted by Hello

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