Amtrak And Tax Dollars

The headline for this AP article on rail subsidies says it all. Shockingly, a government agency has overstated its efficiency and understated its subsidies. This report covered by the article documents the enormous subsidies required to operate Amtrak. It is notable that the totals used in this new study come very close to the totals used by Randal O’Toole in his work for us on high-speed rail. Compare this excerpt from the AP article (emphasis added):

The Northeast corridor has the highest passenger volume of any Amtrak route, greatly enhancing efficiency. The corridor’s high-speed Acela Express made a profit of about $41 per passenger. The more heavily utilized Northeast Regional lost almost $5 per passenger.

With this excerpt from Randal’s paper:

If trains in the most heavily populated corridor in the United States cannot cover their costs, no other trains will come close.

According to the bipartisan Amtrak Reform Council, Amtrak’s trains between Boston and Washington lost nearly $2.30 per passenger in 2001.

They are almost certainly considering different years, so the fact that the estimates are so close is good evidence for the accuracy of O’Toole’s work (not that more evidence was needed). The study claims (and I’ll accept the claim as true) that the northeast high-speed rail system makes money. Before anyone jumps to the conclusion offered in the article:

Rail planners may decide that spending the funds on high-speed rail makes more sense than slower intercity rail, which the Amtrak numbers show need higher subsidies.

You must read the history of high-speed rail in Japan, which O’Toole thoroughly documents in his paper on high-speed rail for the Show-Me Institute. In Japan, the first high-speed rail system was successful because it connected three cities in one of the most densely populated parts of the world. However, for reasons of politics and more, Japan started building high-speed rail all over the place. None of the other routes were anywhere near as successful as the Tokyo–Osaka–Nagoya route, and the national railroad eventually went into serious financial difficulties. The moral of the story is that just because high-speed rail might work in by far the most densely populated part of the United States does not mean it will work elsewhere.

Hat tip to the Beacon for the original link.