Amtrak Debate

[cirdan]

Please learn math. If Amtrak receives 70% of its funds from passenger fares that means it is 30% subsidized.

Not necessarily so.

At least you can't be sure without reading the balance sheet.

There are other possible sources of income than fares and subsidies.

For example income from real estate rental, sale of assets, interest on cash held, income from businesses owned, debt.

I guess that in the case of Amtrak, these sources of income are realtively minor. But still it's not the math that teaches us that.

 

[Ryan]

True - the math tells us that it can be no more than 30% subsidized, not the 100% that PPorro is claiming.

 

[afigg]

Not necessarily so.

At least you can't be sure without reading the balance sheet.

There are other possible sources of income than fares and subsidies.

For example income from real estate rental, sale of assets, interest on cash held, income from businesses owned, debt.

I guess that in the case of Amtrak, these sources of income are realtively minor. But still it's not the math that teaches us that.

The income and expense summary numbers are readily available in the Amtrak monthly and annual financial reports. For FY2011, the revenue numbers in the revised September 2011 monthly report were:

Ticket Revenue: $1,851.5 million

Food & Beverage: $109.4 million

State Support: $188.4 million

Other: $565.0 million.

Other covers a lot of revenue sources: commuter operations, commuter and freight trackage rights fees for Amtrak owned tracks, commercial rents from property and stations Amtrak owns, and probably sales revenue from the Amtrak store. The FY11 annual financial breaks down the "other" category in more detail. The "other" income category makes up about 20% of Amtrak's total income, so it is not that minor.

 

[Trogdor]

I'll allow that comment, but consider that EVERY President and Presidential candidate (of both parties) has wanted to eliminate Amtrak, and some have even proposed a $-0- budget for Amtrak!

That's just patently untrue.

Do we need to start fact-checking our moderators now?

 

[amamba]

No mention of amtrak in the debate.

 

[Eric S]

I'll allow that comment, but consider that EVERY President and Presidential candidate (of both parties) has wanted to eliminate Amtrak, and some have even proposed a $-0- budget for Amtrak!

That's just patently untrue.

Do we need to start fact-checking our moderators now?

I was hoping that there would be some sort of clarification or correction of (what seems to me to be) a rather bizarre claim.

 

[jis]

I'll allow that comment, but consider that EVERY President and Presidential candidate (of both parties) has wanted to eliminate Amtrak, and some have even proposed a $-0- budget for Amtrak!

That's just patently untrue.

Do we need to start fact-checking our moderators now?

'Tis the season and there is something in the air or water or something.

 

[yarrow]

I'll allow that comment, but consider that EVERY President and Presidential candidate (of both parties) has wanted to eliminate Amtrak, and some have even proposed a $-0- budget for Amtrak!

That's just patently untrue.

Do we need to start fact-checking our moderators now?

I was hoping that there would be some sort of clarification or correction of (what seems to me to be) a rather bizarre claim.

i agree, but i thought the moderator's condescending post that he would "allow" my original comment was pretty off the wall as i don't believe it violated anthony's guideline of civility as expressed in his political guidelines

 

[George Harris]

There's actually pretty big support for cutting military spending (the US now spends more than every other military in the world combined, and more than 10 times as much as China -- seems a bit excessive, no?) but somehow it has been unable to get traction in Congress.

Does this mean you believe the numbers you get from all countries on this subject? I certainly don't. Any country with serious understanding of security will hide as much of their military expenditure as they can and that is particularly true for a country like China where the leadership is in no way accountable to the population in general. There is also the differece is pay scale and many other costs which would probably by itself allow a much larger military force than that of the US at 1/10 of the cost of the US forces.

While I hate the playing soldier that goes on way too much in the military, if the country is not able to make it clear that any attack on it is hopeless, what ever else is done with the money becomes inconsequential.

 

[PPorro]

True - the math tells us that it can be no more than 30% subsidized, not the 100% that PPorro is claiming.

Sorry I must have missed modern math and fudge factors. If Amtrak loses $500 million a year which the government puts in, it's running at a loss. There is no net income.

My comments have nothing to do with one political side or another. I'd like to see the passenger railroad work, be efficient, attractive and get used.

Amtrak is seeking annual congressional funding of $1 billion for ten years.

When Amtrak loses $32 per passenger on average, I find it very difficult to claim, there's profit involved somewhere in that figure. :help:

My original point wasn't to quibble about math or percentages, but to ask, would being privatized be better?

And yes, I was disappointed, not a peep about rail or Amtrak in the debate.

 

[AlanB]

My original point wasn't to quibble about math or percentages, but to ask, would being privatized be better?

NO!

Amtrak exists because private industry doesn't want to run passenger rail anymore, at least for as long as massive government subsidies to other modes of transit continue to exist. Yes, there are a couple of private entities currently talking about trying to start up passenger rail, but these are projects that either have additional motives, or are in markets where it might just be possible to compete. But there are no companies vying for the right to run most of Amtrak's services.

Want Amtrak to improve faster than it is, put it on a stable footing. That means that Congress spends some big bucks to return the NEC to a state of good repair, something that it's never done since it gave Amtrak the rundown & badly neglected NEC after the Pennsylvania RR went belly up. And it means that Congress provides a clear funding path for at least 5 years out.

Imagine trying to plan your household budget for next year if your boss didn't tell you how much he was going to pay you until you were halfway through the year. This is the situation that Amtrak faces every year. Makes it very hard to enter into long term contracts, which typically mean lower costs, when you don't know if you'll actually get the money you need to pay that contract.

This is not to suggest that Amtrak couldn't be doing certain things better itself either. There is plenty of room for improvement. But Congress is a large part of the problem for Amtrak.

 

[PPorro]

My original point wasn't to quibble about math or percentages, but to ask, would being privatized be better?

NO!

Amtrak exists because private industry doesn't want to run passenger rail anymore, at least for as long as massive government subsidies to other modes of transit continue to exist. Yes, there are a couple of private entities currently talking about trying to start up passenger rail, but these are projects that either have additional motives, or are in markets where it might just be possible to compete. But there are no companies vying for the right to run most of Amtrak's services.

Want Amtrak to improve faster than it is, put it on a stable footing. That means that Congress spends some big bucks to return the NEC to a state of good repair, something that it's never done since it gave Amtrak the rundown & badly neglected NEC after the Pennsylvania RR went belly up. And it means that Congress provides a clear funding path for at least 5 years out.

Imagine trying to plan your household budget for next year if your boss didn't tell you how much he was going to pay you until you were halfway through the year. This is the situation that Amtrak faces every year. Makes it very hard to enter into long term contracts, which typically mean lower costs, when you don't know if you'll actually get the money you need to pay that contract.

This is not to suggest that Amtrak couldn't be doing certain things better itself either. There is plenty of room for improvement. But Congress is a large part of the problem for Amtrak.

Thanks that's what I was wondering. Looks like nothing will change until something up top changes.

 

[Alexandria Nick]

There's actually pretty big support for cutting military spending (the US now spends more than every other military in the world combined, and more than 10 times as much as China -- seems a bit excessive, no?) but somehow it has been unable to get traction in Congress.

Does this mean you believe the numbers you get from all countries on this subject? I certainly don't. Any country with serious understanding of security will hide as much of their military expenditure as they can and that is particularly true for a country like China where the leadership is in no way accountable to the population in general. There is also the differece is pay scale and many other costs which would probably by itself allow a much larger military force than that of the US at 1/10 of the cost of the US forces.

While I hate the playing soldier that goes on way too much in the military, if the country is not able to make it clear that any attack on it is hopeless, what ever else is done with the money becomes inconsequential.

Without straying too much into an alternate topic, the biggest expenditure is the Navy. Navies are very expensive. But they're also pretty important to national security. Its a vexing and difficult issue. If you reduce your naval expenditures, you invite one of those smaller navies to chip away at your oh so very important global trade network. So as long as you field overwhelming forces, you're fine. And what bites you is that your opponents know they can't face it, so they won't spend the money on their own navy. Which leaves you looking like you've got this ridiculously expensive do nothing navy. As soon as your reduce it, one of those third rates jumps all over you. They're kinda like a fire suppression system. Its expensive and you never really need it, until you need it and by then its too late to get one.

On the matter of Amtrak, $500m isn't so bad. They're spending $1.37 million a day. DoD sneezes and that much comes out. I'm a contractor at an administration that gets 34 times what Amtrak gets and our budget is one of the smallest around. As horrifying as it is to realize, the amount of money spend on Amtrak practically amounts to a rounding error in the entire budget. Its so small that keeping it or getting rid of it has no appreciable impact on the amount of money the government spends.

 

[NAVYBLUE]

Amtrak and PBS make easy targets because they may have relatively small constituencies, but also make up a very small part of the budget, and pretending that eliminating them will help balance the budget is just dishonest.

The only way to cut the budget in a significant way is to cut one of the big categories: Medicare/Medicaid, military, or Social Security. Those (plus interest on the debt) makes up 74% of the budget. In other words, if you got rid of every single cent of spending on everything outside those categories... we'd still be running a deficit.

Ron Paul was the only candidate who had a proposal for real budget cuts. He'd totally eliminate Medicare/Medicaid, Social Security, and most of the military, restricting it to defending immediate US borders. That really would balance the budget and allow big tax cuts as well. Good luck getting that passed, though.

There's actually pretty big support for cutting military spending (the US now spends more than every other military in the world combined, and more than 10 times as much as China -- seems a bit excessive, no?) but somehow it has been unable to get traction in Congress.

http://data.worldban....MIL.XPND.GD.ZS

Not really.. If you will look at the chart referenced, you will see our 2011 military budget is 4.7% of our "GDP" . If we stopped taking care of Germany/Japan who need to learn to take care of themselves since it is 67 years since the end of WW II. our military budget would be about 3.1% just a little above France/India.

That being said, I can in 45 minutes find $800-900 million in savings in the FEDERAL budget that if enacted that would either PROVIDE revenue or allow that money to offset the AMTRAK subsidy and affect NO U.S.govt jobs.

1. Sell every federal building that has NOT been occupied within the last (5) years. There is approximately 1 Trillion dollars in real estate that has not been occupied in the last (5) years. Only $ 500 million of it is in or near areas that are business center areas and/or meet ADA/safety requirements. Sell them and bingo $ 500 million.

2. Eliminate the Social Security maximum taxable earnings limit of $110,000. Bingo $503 billion(over 7 year period). ( As a gun and bible toting Conservatarian, I can't believe I just said that)

3. Make Germany/Japan take care of themselves. Bingo $ 87 Billion.

A billion here a billion there and before you know it we are talking real money. Now why can I find savings but Congress can't "seem" to find any. Republicans AND Democrats get re-elected on spending not saving. With rare exceptions most are lawyers, not economists, accountants or business people.

With my suggestions they could actually INCREASE subsidies to AMTRAK. Ain't going to happen.

NAVYBLUE

PS: My degree is in Economics, I can actually read the federal budget, I actually understand the federal budget and I know how to go into it and figure out about where every dime is going except for "black projects' I know, I live a boring life

 

[Nathanael]

True - the math tells us that it can be no more than 30% subsidized, not the 100% that PPorro is claiming.

I accept that correction, I forgot about non-fare revenue.

 

[Nathanael]

There's actually pretty big support for cutting military spending (the US now spends more than every other military in the world combined, and more than 10 times as much as China -- seems a bit excessive, no?) but somehow it has been unable to get traction in Congress.

Does this mean you believe the numbers you get from all countries on this subject? I certainly don't. Any country with serious understanding of security will hide as much of their military expenditure as they can and that is particularly true for a country like China where the leadership is in no way accountable to the population in general.

It's true that their budget numbers are fishy -- careful analysis of the Chinese military budget from the people who've done it, says that they've actually stuffed a whole lot of non-military things into their military budget -- the military in China owns apartment buildings, banks, shops, etc. So their budget is probably an *over*estimate of their military spending.

So.

There is also the differece is pay scale and many other costs which would probably by itself allow a much larger military force than that of the US at 1/10 of the cost of the US forces.

Applies to manpower, not to hardware.

While I hate the playing soldier that goes on way too much in the military, if the country is not able to make it clear that any attack on it is hopeless, what ever else is done with the money becomes inconsequential.

Sure, but that's not done by spending money, that's done by, y'know, success. Which has been in short supply since the end of WWII. (I just saw a long speech about why this might be -- the Nimitz Lecture by Tom Ricks,

).
I don't think most of the military budget these days is actually going to useful stuff, I think it's going to feed what Eisenhower called the "military-industrial complex".

Boy are we getting off topic.

 

[Nathanael]

That being said, I can in 45 minutes find $700-800 million in savings in the FEDERAL budget that if enacted that would either PROVIDE revenue or allow that money to offset the AMTRAK subsidy and affect NO U.S.govt jobs.

1. Sell every federal building that has NOT been occupied within the last (5) years. There is approximately 1 Trillion dollars in real estate that has not been occupied in the last (5) years. Only $ 500 million of it is in or near areas that are business center areas and/or meet ADA/safety requirements. Sell them and bingo $ 500 million.

2. Eliminate the Social Security maximum taxable earnings limit of $110,000. Bingo $503 billion(over 7 year period). ( As a gun and bible toting Conservatarian, I can't believe I just said that)

3. Make Germany/Japan take care of themselves. Bingo $ 87 Billion.

A billion here a billion there and before you know it we are talking real money. Now why can I find savings but Congress can't "seem" to find any. Republicans AND Democrats get re-elected on spending not saving. With rare exceptions most are lawyers, not economists, accountants or business people.

Well, I sure agree on all of that! (A lot of the 'business people' in Congress aren't really business people either, but delving into the horrors of corporate governance in the US is a matter for another time...)

It doesn't help that the private companies which are currently getting money hire lobbyists to *make sure they keep getting money*, and often those lobbyists get more "face time" to persuade Congressmen than, really, anyone else in the country. In fact, people take jobs as congressional staff, then become lobbyists, then become congressional staff again.... similar things happen in the executive branch agencies.

This situation has evolved for good reasons and it's really not straightforward (perhaps not even possible) to stop it, but it's a problem, and it's a problem which *feeds on itself* -- the more money and favors a contractor gets from the government, the more they can afford to spend lobbying for more money and favors. So even with well-meaning people in Congress, the Congressmembers spend an awful lot of their time listening to paid propaganda from lobbyists, and even without outright bribery, this doesn't create an environment conducive to good decision-making.

With my suggestions they could actually INCREASE subsidies to AMTRAK. Ain't going to happen.

NAVYBLUE

PS: My degree is in Economics, I can actually read the federal budget, I actually understand the federal budget and I know how to go into it and figure out about where every dime is going except for "black projects' I know, I live a boring life

Heh. I can do that sort of stuff too and I also lead a boring life. The military budget is particularly hard to track though, there's a practice of scattering money for essentially military projects around (not just in the DoD), so I have tended to rely on others for totals.

 

[Nathanael]

There's actually pretty big support for cutting military spending (the US now spends more than every other military in the world combined, and more than 10 times as much as China -- seems a bit excessive, no?) but somehow it has been unable to get traction in Congress.

http://data.worldban....MIL.XPND.GD.ZS

Not really.. If you will look at the chart referenced, you will see our 2011 military budget is 4.7% of our "GDP" .

FYI, your statement doesn't contradict mine. % of GDP is not the same measurement as absolute spending, and in absolute spending the US is spending about as much as the rest of the world combined. I suppose what I really want is Purchasing Power Parity spending, but that's a pain to compute...

 

[AmtrakBlue]

Amtrak and PBS make easy targets because they may have relatively small constituencies, but also make up a very small part of the budget, and pretending that eliminating them will help balance the budget is just dishonest.

The only way to cut the budget in a significant way is to cut one of the big categories: Medicare/Medicaid, military, or Social Security. Those (plus interest on the debt) makes up 74% of the budget. In other words, if you got rid of every single cent of spending on everything outside those categories... we'd still be running a deficit.

Ron Paul was the only candidate who had a proposal for real budget cuts. He'd totally eliminate Medicare/Medicaid, Social Security, and most of the military, restricting it to defending immediate US borders. That really would balance the budget and allow big tax cuts as well. Good luck getting that passed, though.

There's actually pretty big support for cutting military spending (the US now spends more than every other military in the world combined, and more than 10 times as much as China -- seems a bit excessive, no?) but somehow it has been unable to get traction in Congress.

http://data.worldban....MIL.XPND.GD.ZS

Not really.. If you will look at the chart referenced, you will see our 2011 military budget is 4.7% of our "GDP" . If we stopped taking care of Germany/Japan who need to learn to take care of themselves since it is 67 years since the end of WW II. our military budget would be about 3.1% just a little above France/India.

That being said, I can in 45 minutes find $700-800 million in savings in the FEDERAL budget that if enacted that would either PROVIDE revenue or allow that money to offset the AMTRAK subsidy and affect NO U.S.govt jobs.

1. Sell every federal building that has NOT been occupied within the last (5) years. There is approximately 1 Trillion dollars in real estate that has not been occupied in the last (5) years. Only $ 500 million of it is in or near areas that are business center areas and/or meet ADA/safety requirements. Sell them and bingo $ 500 million.

2. Eliminate the Social Security maximum taxable earnings limit of $110,000. Bingo $503 billion(over 7 year period). ( As a gun and bible toting Conservatarian, I can't believe I just said that)

3. Make Germany/Japan take care of themselves. Bingo $ 87 Billion.

A billion here a billion there and before you know it we are talking real money. Now why can I find savings but Congress can't "seem" to find any. Republicans AND Democrats get re-elected on spending not saving. With rare exceptions most are lawyers, not economists, accountants or business people.

With my suggestions they could actually INCREASE subsidies to AMTRAK. Ain't going to happen.

NAVYBLUE

PS: My degree is in Economics, I can actually read the federal budget, I actually understand the federal budget and I know how to go into it and figure out about where every dime is going except for "black projects' I know, I live a boring life

My Economics teacher in college "taught" by reading from the textbooks. Talk about boring.

 

[Ryan]

True - the math tells us that it can be no more than 30% subsidized, not the 100% that PPorro is claiming.

Sorry I must have missed modern math and fudge factors. If Amtrak loses $500 million a year which the government puts in, it's running at a loss. There is no net income.

Modern math and fudge factors don't have anything to do with it. Your statement that Amtrak is 100% subsidized is 100% false.

The vast majority of Amtrak's income comes from ticket revenue.

When Amtrak loses $32 per passenger on average, I find it very difficult to claim, there's profit involved somewhere in that figure.

Who is claiming that they have any profit?

Do you understand the difference between "income" and "profit"?

 

[NAVYBLUE]

Amtrak and PBS make easy targets because they may have relatively small constituencies, but also make up a very small part of the budget, and pretending that eliminating them will help balance the budget is just dishonest.

The only way to cut the budget in a significant way is to cut one of the big categories: Medicare/Medicaid, military, or Social Security. Those (plus interest on the debt) makes up 74% of the budget. In other words, if you got rid of every single cent of spending on everything outside those categories... we'd still be running a deficit.

Ron Paul was the only candidate who had a proposal for real budget cuts. He'd totally eliminate Medicare/Medicaid, Social Security, and most of the military, restricting it to defending immediate US borders. That really would balance the budget and allow big tax cuts as well. Good luck getting that passed, though.

There's actually pretty big support for cutting military spending (the US now spends more than every other military in the world combined, and more than 10 times as much as China -- seems a bit excessive, no?) but somehow it has been unable to get traction in Congress.

http://data.worldban....MIL.XPND.GD.ZS

Not really.. If you will look at the chart referenced, you will see our 2011 military budget is 4.7% of our "GDP" . If we stopped taking care of Germany/Japan who need to learn to take care of themselves since it is 67 years since the end of WW II. our military budget would be about 3.1% just a little above France/India.

That being said, I can in 45 minutes find $700-800 million in savings in the FEDERAL budget that if enacted that would either PROVIDE revenue or allow that money to offset the AMTRAK subsidy and affect NO U.S.govt jobs.

1. Sell every federal building that has NOT been occupied within the last (5) years. There is approximately 1 Trillion dollars in real estate that has not been occupied in the last (5) years. Only $ 500 million of it is in or near areas that are business center areas and/or meet ADA/safety requirements. Sell them and bingo $ 500 million.

2. Eliminate the Social Security maximum taxable earnings limit of $110,000. Bingo $503 billion(over 7 year period). ( As a gun and bible toting Conservatarian, I can't believe I just said that)

3. Make Germany/Japan take care of themselves. Bingo $ 87 Billion.

A billion here a billion there and before you know it we are talking real money. Now why can I find savings but Congress can't "seem" to find any. Republicans AND Democrats get re-elected on spending not saving. With rare exceptions most are lawyers, not economists, accountants or business people.

With my suggestions they could actually INCREASE subsidies to AMTRAK. Ain't going to happen.

NAVYBLUE

PS: My degree is in Economics, I can actually read the federal budget, I actually understand the federal budget and I know how to go into it and figure out about where every dime is going except for "black projects' I know, I live a boring life

My Economics teacher in college "taught" by reading from the textbooks. Talk about boring.

Fortunately for me AmtrakBlue I "never" had to listen to a professor. I challenged all (4) years of college. So I never had to listen to "business" (Economics/Finance/Statistics/Accounting)professors who for the most part have never "worked" outside of academia. I have read over 150 business books and have never read one by a non professional. Academic business professors for the most part are as useful as a screen door on a submarine. Everything to them is a computer model that if you do this, them this is going to happen. Back to school with Rodney Dangerfield is an excellent example of the difference between a business professor and a "real" business person

I deal with "real' people in "real" jobs who talk the talk and walk the walk. I did teach at a junior college and really enjoyed it. Economics can be interesting IF you can relate it to "real" world and not computer models.

NAVYBLUE

 

[AlanB]

As horrifying as it is to realize, the amount of money spend on Amtrak practically amounts to a rounding error in the entire budget. Its so small that keeping it or getting rid of it has no appreciable impact on the amount of money the government spends.

This IMHO is a very key point. Amtrak represents 0.04% of the Federal budget. That's it! It doesn't even make a dent in the deficit.

And yet we have people like Congressmen Mica holding multiple hearings costing most likely a couple of Million dollars to worry about something that is a rounding error in the Federal budget.

 

[AlanB]

There is also the differece is pay scale and many other costs which would probably by itself allow a much larger military force than that of the US at 1/10 of the cost of the US forces.

Applies to manpower, not to hardware.

Not true at all.

If I'm building a tank for example, sure raw materials may well be in the ball park regardless of where I'm building said tank. But if I'm paying workers $15 an hour to put said tank together here in the US and 50 cents an hour to do it in China, clearly the tank that I built in China is going to cost a whole lot less.

 

[Ryan]

Yeah, but it's also a tank made in China.

As far as the other countries misrepresenting costs and being able to do things cheaper, that really doesn't change the overall balance that much:

 

[George Harris]

I should probably resist the urge to deal with your points, but I won't. After this I do intend to shut up on this subject.

There's actually pretty big support for cutting military spending (the US now spends more than every other military in the world combined, and more than 10 times as much as China -- seems a bit excessive, no?) but somehow it has been unable to get traction in Congress.

Does this mean you believe the numbers you get from all countries on this subject? I certainly don't. Any country with serious understanding of security will hide as much of their military expenditure as they can and that is particularly true for a country like China where the leadership is in no way accountable to the population in general.

It's true that their budget numbers are fishy -- careful analysis of the Chinese military budget from the people who've done it, says that they've actually stuffed a whole lot of non-military things into their military budget -- the military in China owns apartment buildings, banks, shops, etc. So their budget is probably an *over*estimate of their military spending.

Most of these things you just listed are profit making ventures. That is a gripe in China. The military is horning in on business.

There is also the differece is pay scale and many other costs which would probably by itself allow a much larger military force than that of the US at 1/10 of the cost of the US forces.

Applies to manpower, not to hardware.

Already answered. Most of the hardware is also much cheaper.

While I hate the playing soldier that goes on way too much in the military, if the country is not able to make it clear that any attack on it is hopeless, what ever else is done with the money becomes inconsequential.

Sure, but that's not done by spending money, that's done by, y'know, success. Which has been in short supply since the end of WWII.

True. Saw it both ways in Vietnam. That should not really be regarded as a military failure, at least in the majority part of the failure. We managed to pull defeat out of the jaws of victory on that one, at least in my opinion.