Economics, Pethokoukis

You haven’t seen America ’til you’ve seen it from a subsidized train

Image Credit: jpmueller99 (Flickr) (CC BY 2.0)

Image Credit: jpmueller99 (Flickr) (CC BY 2.0)

If you’re losing millions every year selling cheeseburgers and sodas, the rest of your business probably isn’t a model of efficiency, either. Amtrak’s food and beverage cars have lost $833.8 million over the last decade, including $84.5 million in 2011. But that’s just the beginning of Amtrak’s troubles, notes AEI’s Daniel Hanson. A few financial facts about the rail service, which lost a total of $361 billion last year:

1. Over the past three years alone, Amtrak has received more than $4.4 billion in federal aid, and it still was not able to finish any of those years in the black.

2. Most riders pay about $150 to get from Washington to Boston — a route that cost $125 in 1997 — but today’s real cost is much higher than it seems. Through subsidies, the federal government kicks in almost $50 for every Amtrak ticket, putting the average real fare of an Amtrak ticket close to $200.

3. Between 1997 and 2004, Amtrak built its high-speed Acela system from Washington to Boston on the premise that it would get riders between major cities faster. Today, the Acela can get from Washington to New York in 2 hours 45 minutes at its fastest — or 15 minutes slower than the Penn Central Railroad could get a rider there in 1969 for an inflation-adjusted $102 per ticket.

Oh, and the Wi-Fi stinks, too.

7 thoughts on “You haven’t seen America ’til you’ve seen it from a subsidized train

  1. Considering the, automobile, tire and oil industries did their best to sabotage private rail transportation in the 1930′s-40′s-50′s and largely succeeded, points to the fact that the “invisible hand” does not always give us the best long run solutions when such large infrastructure is needed. I’d be interested in hearing your long run solutions on rail transport in this country instead of just running down Amtrak.

    • “points to the fact that the “invisible hand” does not always give us the best long run solutions when such large infrastructure is needed.”

      It points to the fact that the market gives the people what they want, not stinky gross mass transit liberals want to impose on them.

    • I’d be interested in hearing your long run solutions on rail transport in this country…

      That makes the assumption that rail will be needed in the long-run.

  2. Fine article, except it should read $362 million, not billion.

    Rail is highly profitable for freight. The density of population for rail required to enable a profit exists in only a handful of places in the world.

  3. I love Amtrak. Traveling by train is the way to go, in my opinion. You get to relax and see the country. No need to worry about traffic jams, crazy drivers, creepy TSA agents, and all that.

    I just don’t see why it needs to be subsidized.

    I am not knocking Amtrak. In my experience, their staff does a great job. The food is very good, the porters are helpful, and the cars are comfy (I’ve only ever traveled in first class, so I cannot speak to coach). I absolutely love it. But I just don’t see why the taxpayers need to fund my railroad baron fantasies.

  4. Recently, I’ve started wondering about how passenger train design has stagnated. With all the new technology developed in the past 30 years, why does it still take $850,000,000 to create a 44 mile Provo-SLC Commuter Rail line which runs right next to an existing freight rail line? Either government regulations or a serious lack of competition is preventing engineering innovation.

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