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Muda69

Amtrak's big lie

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https://www.washingtonexaminer.com/opinion/amtraks-big-lie

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Recent articles in respected business journals report that Amtrak lost only $29.8 million in 2019 (out of $3.3 billion in total revenues) and that it expects to make a profit in 2020. This is a remarkable turnaround for a company that cost taxpayers more than $100 billion in its first 49 years of existence. Amtrak accomplished this using a simple yet apparently effective technique: It's called lying.

Amtrak's accounting system is so full of lies that even the pro-passenger train Rail Passengers Association calls it "fatally flawed, misleading, and wrong."

The first lie is that Amtrak counts taxpayer subsidies from the states as "passenger revenues." According to Amtrak's unaudited report, 17 state legislatures gave Amtrak a total of $234 million in 2019. The taxpayers in those states were never allowed to vote on these subsidies, and the vast majority don't ride Amtrak. These subsidies are no more "passenger revenues" than the subsidies given to Amtrak by Congress. Deducting these subsidies from revenues immediately increases Amtrak's 2019 losses to $264 million.

An even bigger lie is Amtrak's failure to report depreciation in its operating costs. Ignoring depreciation is an old railroad accounting trick aimed at misleading investors by boosting apparent profits.

A classic example was the Rock Island Railroad, which ran many fast passenger trains throughout the Midwest in the 1950s. Then Rock Island proposed to merge with another railroad, and to improve the merger terms it began deferring maintenance. By the time the federal government approved the merger, Rock Island's tracks were so decrepit that its passenger trains ran as slow as 10 miles per hour. The other railroad backed out, and Rock Island shocked the nation by going out of business.

The Interstate Commerce Commission responded by requiring railroads to include depreciation among their operating costs. This represents the amount of money railroads have to spend or save to keep their infrastructure and equipment in good shape, ensuring that investors would never again be misled by deferred maintenance.

Amtrak dutifully includes depreciation in its audited financial statements, but it never mentions it in its press releases about its finances. In 2019, depreciation amounted to $868 million, increasing total losses to $1.13 billion — 38 times as much as claimed.

Even with federal capital subsidies, Amtrak is deferring maintenance like crazy. Amtrak passenger cars have expected lifespans of 25 years, yet the average car in its fleet is well over 30 years old. The Boston-to-Washington corridor, which Amtrak has often claimed to be profitable, has a $38 billion maintenance backlog.

Fixing just these two line items in Amtrak's accounting shows that Amtrak did not come close to earning a profit in 2019, it won't earn a profit in 2020, and it never will earn a profit. This is because, after counting all subsidies, Amtrak spends four times as much to move a passenger one mile as the airlines. The difference between Amtrak and intercity buses is even greater, which means Amtrak can't compete in any market without heavy subsidies.

Of course, airlines and highways are also subsidized, and we should end those subsidies as well. But federal, state, and local subsidies to air and highway travel average around a penny per passenger mile, whereas Amtrak subsidies were 34 cents per passenger mile in 2019.

Amtrak's biggest lie is that passenger trains are somehow vital to the nation's economy. Last year, Americans traveled an average of 15,000 miles by automobile, 2,100 miles by plane, and 1,100 miles by bus. Amtrak's contribution was less than 20 miles per person. Even in the Northeast Corridor, Amtrak reluctantly admits that it carries only 6% of intercity travelers.

According to the best available estimates, Americans bicycle 8.5 billion passenger miles a year compared with 6.5 billion passenger miles on Amtrak. Being less important than bicycles, Amtrak certainly doesn't deserve the $2 billion in annual subsidies that it requires to run a supposedly almost-profitable operation.

Rather than give Amtrak billions of dollars to restore or build infrastructure that it can't afford to maintain, Congress should simply agree to pay Amtrak a given amount for every passenger mile it carries. This will give Amtrak an incentive to focus on passengers, not politics.

Over time, Congress should reduce that amount until Amtrak receives no more per passenger mile than airlines or highways. Any trains that can truly be profitable will survive, but if they do, it will be because Amtrak has found ways to efficiently transport people, not because of lies in its accounting system.

Agreed.  Amtrak needs to be weaned off the taxpayer funded teat and learnt to sink or swim on it's own.

 

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29 minutes ago, DanteEstonia said:

How about no?

The reason being?

 

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47 minutes ago, Muda69 said:

https://www.washingtonexaminer.com/opinion/amtraks-big-lie

Agreed.  Amtrak needs to be weaned off the taxpayer funded teat and learnt to sink or swim on it's own.

 

The answer being:

IND-ATL Saturday 1-25

AMTRAK $226 8:10

Southwest $199 1:40 gate to gate

Romance is over rated in my opinion. 

Rail freight makes sense, rail passenger no longer does.

Edited by Impartial_Observer
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1 minute ago, Impartial_Observer said:

The answer being:

IND-ATL Saturday 1-25

AMTRAK $226 8:10

Southwest $199 1:40 gate to gate

Honestly the travel times don't bother me.  Any rational individual should know what they are getting into if they choose rail over plane travel. 

I can see that the romanticism and more leisurely pace of traveling across the country by rail can be an attraction to certain individuals,  but why should the federal government and the taxpayer have to pay for it?

 

 

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23 minutes ago, Muda69 said:

Honestly the travel times don't bother me.  Any rational individual should know what they are getting into if they choose rail over plane travel. 

I can see that the romanticism and more leisurely pace of traveling across the country by rail can be an attraction to certain individuals,  but why should the federal government and the taxpayer have to pay for it?

 

 

The other issue with rail is, limited schedules. If I want to fly somewhere there are literally a gazillion options. 

On another note, DD had a teammate in TB who's dad was an investigator with AMTRAK. If there was an accident involving an AMTRAK train east of the Mississippi, he was the man. Spent an afternoon at his office one day. On the bright side of things, it was about the time our kids were starting to drive, it put the fear of god in them regarding trains. I saw some brutal stuff, vid from the trains, crash scene photos, autopsy photos, horrible stuff.  

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11 hours ago, Muda69 said:

Honestly the travel times don't bother me.  Any rational individual should know what they are getting into if they choose rail over plane travel. 

I can see that the romanticism and more leisurely pace of traveling across the country by rail can be an attraction to certain individuals,  but why should the federal government and the taxpayer have to pay for it?

 

 

Amtrak is often the only form of mass transit small rural communities have to the wider USA.

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8 hours ago, DanteEstonia said:

Amtrak is often the only form of mass transit small rural communities have to the wider USA.

So without Amtrak, we’d have to hitch a team to the wagon to get maw to the doctor in the big city?

What about all the rural areas Amtrak doesn’t serve, what about those poor people, how will they connect to the wider USA. In southern Indiana we have to either get to Indy or Louisville to get on a Greyhound to get to a train. Or you could just stop at the airport and get where you need to go cheaper and before the bus even gets you to the train.

Amtrak in the northeast corridor seems to make sense to me, gets cars off of already congested roads, and they have the masses to support mass transit. This isn’t the 19th century, the US taxpayers don’t need to be supporting people’s travel.

 

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2 hours ago, Impartial_Observer said:

So without Amtrak, we’d have to hitch a team to the wagon to get maw to the doctor in the big city?

What about all the rural areas Amtrak doesn’t serve, what about those poor people, how will they connect to the wider USA. In southern Indiana we have to either get to Indy or Louisville to get on a Greyhound to get to a train. Or you could just stop at the airport and get where you need to go cheaper and before the bus even gets you to the train.

Amtrak in the northeast corridor seems to make sense to me, gets cars off of already congested roads, and they have the masses to support mass transit. This isn’t the 19th century, the US taxpayers don’t need to be supporting people’s travel.

 

Southern Indiana is served by intercity bus; Amtrak operates several intercity bus routes.

2 hours ago, Impartial_Observer said:

Amtrak in the northeast corridor seems to make sense to me, gets cars off of already congested roads, and they have the masses to support mass transit.

So you agree with the video’s points?

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21 minutes ago, DanteEstonia said:

Southern Indiana is served by intercity bus; Amtrak operates several intercity bus routes.

So you agree with the video’s points?

The nearest intercity bus to me is Bedford. Two things, first I still have to hitch a team to the wagon to get maw to Bedford, to catch a bus, to catch the train.  Or instead of driving 40 minutes to Bedford, I could drive 60 minutes to IND or SDF and still be at my destination cheaper and most likely before the bus makes it to Indy to catch the bus to Chicago to get on the train. Why are the taxpayers funding this boondoggle that makes zero business or logical sense.

FTFY and I don't really know, I didn't watch the video.

Yes, Amtrak should operate money making routes in the northeast corridor, where they can be profitable and thus not rely on taxpayer funding or they should just go out of business. 

If government subsidies are the answer, I'm sure you'd have no problem with the government subsidizing my business would you? And I'd only need fractions of pennies on the dollar of what Amtrak gets. Or even better yet, like farmers, perhaps the government would pay me not to produce anything? 

Edited by Impartial_Observer

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18 minutes ago, Impartial_Observer said:

FTFY and I don't really know, I didn't watch the video.

Watch it.

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Image result for Watch it A clockwork orange

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12 minutes ago, gonzoron said:

Image result for Watch it A clockwork orange

IO might actually learn something for once in his life.

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12 minutes ago, DanteEstonia said:

IO might actually learn something for once in his life.

I disagree with Dean Wormer, fat, drunk, and stupid is a way to go thru life.

Honestly DE, I tried to engage you, I've raised valid business concerns as well as taxpayer concerns, you refuse to answer any of it, you just want me to watch a stupid video. I don't know jack squat about passenger rail, but it's not hard to figure out. In order for mass transit to work, you have to have masses, which do not exist in flyover country. There used to be a bus stop in every little berg and a train station in every other little berg. Seymour was founded on a RR crossroads and named after the engineer who opted to locate the crossroads where it is, instead of in the already established town of Rockford. But those days are gone. Two income homes, an extensive interstate system, cars that become more reliable every day, safe predictable air travel, passenger rail just does not make business or logical sense, regardless of what some youtube video says. 

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53 minutes ago, Impartial_Observer said:

I disagree with Dean Wormer, fat, drunk, and stupid is a way to go thru life.

Honestly DE, I tried to engage you, I've raised valid business concerns as well as taxpayer concerns, you refuse to answer any of it, you just want me to watch a stupid video. I don't know jack squat about passenger rail, but it's not hard to figure out. In order for mass transit to work, you have to have masses, which do not exist in flyover country. There used to be a bus stop in every little berg and a train station in every other little berg. Seymour was founded on a RR crossroads and named after the engineer who opted to locate the crossroads where it is, instead of in the already established town of Rockford. But those days are gone. Two income homes, an extensive interstate system, cars that become more reliable every day, safe predictable air travel, passenger rail just does not make business or logical sense, regardless of what some youtube video says. 

Rack this post!

Now just waiting for the "but, but rail is better for the environment!  What about climate change?" angle................................

 

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26 minutes ago, Muda69 said:

Rack this post!

Now just waiting for the "but, but rail is better for the environment!  What about climate change?" angle................................

 

Usually when he's got nothing, just the shoot me thingey.

 

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this is what I know

My days in London and Paris recently:  The EUROSTAR train station got me from London to Paris round trip for about 100 bucks a person.  Train time was a little over 2 hours.   High Speed rail was awesome.   

 

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1 hour ago, Coach Nowlin said:

this is what I know

My days in London and Paris recently:  The EUROSTAR train station got me from London to Paris round trip for about 100 bucks a person.  Train time was a little over 2 hours.   High Speed rail was awesome.   

 

That makes perfect sense:

London has nearly 9 million people

Paris has over 2 million people

Their roads were designed for horses

Easy Jet does the same thing for about 65 bucks, but you'll have to use binoculars to get the same view, it does appear to go by slightly slower from 35,000 feet though.

Yea about that high speed rail in the US....

I'm not arguing the merits of train travel, I love ya man, but I don't think it's my place to subsidize your ticket.

Edited by Impartial_Observer

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On 1/16/2020 at 8:11 AM, Impartial_Observer said:

Usually when he's got nothing, just the shoot me thingey.

 

Did you watch the video?

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1 hour ago, DanteEstonia said:

Did you watch the video?

I did.  12 minutes of nothing I hadn't read already,  all for an AWAY suitcase ad.

 

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21 hours ago, Muda69 said:

I did.  12 minutes of nothing I hadn't read already,  all for an AWAY suitcase ad.

 

So, what is Amtrak’s purpose again?

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28 minutes ago, Impartial_Observer said:

Same as any business, to make money.

And there’s the kicker... Amtrak is not a business.

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