The Economist Issues a Reality Check to Rail Privatization Proponents

The Economist’s blog on business travel, Gulliver, has a short post this morning about Rep. John Mica’s proposal to privatize the Northeast Corridor. Blogger “N.B.” has a healthy dose of skepticism for arguments on either side but does significantly more damage to Mica’s argument that that of his opponents. Gulliver strikes a blow at the very idea that private companies can accomplish what Mica hopes they will:

Photo: ##http://www.economist.com/blogs/gulliver/2011/06/privatising-amtrak##The Economist##

Surely the congressman is aware that most high-speed systems elsewhere in the first world were built with enormous investments of government money (not to mention exercises of government power, including eminent domain seizures to find land for new routes).

Major infrastructure projects, be they airports, highways, or railroads, are more often than not undertaken with significant government support. Privatisation of established rail lines has been successful before and can be again. But Americans shouldn’t trick themselves into thinking that private investors will willingly foot the bill for massively upgrading the nation’s high-speed rail infrastructure.

The post also questions the anti-privatization argument that the proposal would leave less profitable routes without an important source of funding. “Economics, not nostalgia or politics, should determine where Amtrak operates,” N.B. writes. “Right now, it’s often the opposite. Is it really necessary that Amtrak service Dodge City, Kansas (pop. 27,340)?”

Of course, the blog also says the obvious: this proposal isn’t going anywhere. House members can argue about it all they want, but the Senate isn’t having it, and neither is the president. It was wise of Mica to introduce the bill separately from the rest of the reauthorization, to avoid the risk of letting this controversial idea sink the rest of the bill.

  • WJOROURKEHIMSELF1

     As stated in this article all major rail networks in other countries have massive support from government from track building to security to cost subsidies … just like our own airport systems. What all rail operations for passengers need is a dedicated funding source to under pin the unfunded ticket prices … mail contracts and express movements by rail … a one cent per pull ‘sin tax’ on all casino slot machine wagers or a one cent tax on beer and liquor, a national deposit of $0.05 on all cans and bottles of any beverage sold in America with the unredeemed portion excess used for rail subsidies … a one cent tax on the sale of each share of stock or other stock transactions … mere pennies can do wonders when they unite.
    This is the real way to fund passenger rail operations should any political party have the guts to do some real good for the American People again !!!
    The last item to control is the liability of passengers who are or claim to be hurt on or about any train operations … total personal payments should not exceed $250,000 and any attny. who represents such clients shall not receive any compensation above 15% of the award to the passenger.
    Regards  Walter ORourke

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