Posts in "Amtrak"

By P.L. Fraietta at 4:03PM

Jun 8, 2011

Do we need Amtrak and the USPS?

Yesterday, Republican Presidential candidate and former Minnesota Governor Tim Pawlenty outlined his plan for economic recovery. Though I do not believe the government can fix the economy I found some of what he said intriguing, particularly when he discussed the possibility of turning Amtrak and the USPS over to private hands.

Amtrak

The initial motivation for government get involved with the railroads was, ironically, to prevent monopoly. Back in the days when the rails were the only efficient way (horse and wagon being the next best option) to ship/travel cross country rail, demand was nearly limitless, which allowed rail companies to charge whatever they wanted. Fast forward to today. We now have cars and planes to travel/ship things cross country. In economics 101 we call this substitute goods. Once a substitute good is introduced into the market, demand falls, competition rises, and prices fall. If rails today charged an outrageous price for a train ticket from NYC to Baltimore, people would (and do) drive or fly.

Pick an Agency, Any Agency: Amtrak

As fiscal conservatives continue to seek avenues through which to derail the federal gravy train, it helps from time to time to take a look at the mind-numbingly long list of federal departments and agencies that are on board. Of course, this list is hardly exhaustive – just one that is publicly available – but it can certainly give us some concrete ideas on how and where to cut the spending.

Today: The National Railroad Passenger Corporation (Amtrak)

Amtrak Logo

About: “The National Railroad Passenger Corporation, doing business as Amtrak (reporting mark AMTK), is a government-owned corporation that was organized on May 1, 1971, to provide intercity passenger train service in the United States.”
FY 2010 Budget: $2.02 billion (Source)

As I recently contemplated a trip in several weeks from New York City to visit friends in Washington, DC, I considered my options. Being on a tight budget as a college student, a flight was out of the question – besides, the trip isn't so far, and I'd rather not subject myself to whatever the airport security standards happen to be in a few weeks. Fortunately, I turned to one of the many privately-run bus lines that operates on a 24/7 basis for a great deal: at only $17 round-trip, a 4-and-a-half hour bus ride would be a breeze, especially with the wireless internet.