Amtrak liquidation deadline passes

[Superliner Diner]

The National Taxpayers Union (NTU) put out a press release today, reminding us that December 2, 2002 was supposed to be the deadline imposed by Congress in 1997, authorizing Amtrak to continue onward, with the requirement that they become self-sufficient by 12/2/02 or begin to liquidate. I am not sure what the NTU has to do with Amtrak, but their words against them are pretty scathing.

They mention that the Janesville-Chicago route loses $580 per passenger, and covers only 6% of its costs. But wait a minute, wasn't that train cancelled effective September 22, 2001? So they don't even have their facts straight.

They also call for an oversight committee to auction off Amtrak's assets, and "permit regional railroads in the Northeast and Far West to expand their increasingly popular passenger services." What regional railroads? I didn't know there were any other intercity passenger railroads besides Amtrak. Surely they are not suggesting that commuter railroads take over the function of Amtrak's intercity routes -- that would stretch them too thin and possibly result in much slower intercity service, which would be making local stops at commuter stations.

Without further ado, the press release is here.

 

[Amtrak Watcher]

And UAL threatens to file for protection from its creditors unless it can get a $1.7b loan guarantee from the Federal Government. If you go back 50 years, the entire commercial passenger air system hasn't made a profit either. Its all in the language: smoke and mirrors. The authorities refuse to use clear and precise terms on health care matters, defense issues, social programs, and telecommunications regulations. Why should we expect clarity on transportation matters?

 

[Amfleet]

As long as the NTU is not part of the government, Amtrak is fine.

 

[AlanB]

As long as the NTU is not part of the government, Amtrak is fine.

Actually part of NTU's funding does come from the Government. However, the Government doesn't have to listen to anything that the NTU says.

So the bottom line here is that "We the people" have our money wasted supporting NTU, so this group can tell us how the Government wastes our money, while the Government ignores all of NTU's advice and wastes even more of our money.

We call this good Government. :unsure:

 

[Amfleet]

Ah the good ol' US government where people get paid large sums of money to do diddly squat.

 

[Viewliner]

NTU is a non-profit, non-partisan organization working for lower taxes, less wasteful spending, and accountable government at all levels.

Mean while you don't hear them complaing about the (wasteful) funding of the airlines.

 

[tp49]

My personal favorite is the FAA's mandate to regulate and promote the industry. I always thought that one would contradict the other.

 

[Amtrak Watcher]

There is an out-of-print book (Marka, "The Economics of Chronic Disease, Infrastructure and Large Systems") that explains (among many other interesting things) that since man stopped using his own feet or animals, the cost of transportation has NEVER been fully born by those who use it. All of them require heavy subsidies from the general population. If you add up the costs of the FAA, the airports, security, and fuel subsidies, the airline industry is in exactly the same place Amtrak is. The periodic “profit statements” from some airlines are pure fiction. And it’s not just transportation. Would the owners of professional sports teams make a “profit” if governments didn’t fund arenas, and the broadcasters didn’t provide free advertising every day on the news? Anyone could formulate a profitable picture for Amtrak merely by manipulating the economic model. The NTU’s views are just another in a vast universe of smoke and confusion. Amtrak is part of the national infrastructure, just as hospitals, roads, rivers, dams, water supplies, libraries, universities, and drug companies are. But most people resist dealing with complex systems: it’s boring and not at all sexy.

 

[AlanB]

There is an out-of-print book (Marka, "The Economics of Chronic Disease, Infrastructure and Large Systems") that explains (among many other interesting things) that since man stopped using his own feet or animals, the cost of transportation has NEVER been fully born by those who use it. All of them require heavy subsidies from the general population. If you add up the costs of the FAA, the airports, security, and fuel subsidies, the airline industry is in exactly the same place Amtrak is. The periodic “profit statements” from some airlines are pure fiction. And it’s not just transportation. Would the owners of professional sports teams make a “profit” if governments didn’t fund arenas, and the broadcasters didn’t provide free advertising every day on the news? Anyone could formulate a profitable picture for Amtrak merely by manipulating the economic model. The NTU’s views are just another in a vast universe of smoke and confusion. Amtrak is part of the national infrastructure, just as hospitals, roads, rivers, dams, water supplies, libraries, universities, and drug companies are. But most people resist dealing with complex systems: it’s boring and not at all sexy.

Very well said!!

 

[Poindexter118]

Thank you, Amtrak watcher- Yes, United Airlines will get it's bailout

money, because for some reason the Feds like the airlines, and seem

at the best lukewarm about Amtrak. And you're right that the airlines

have never been self sufficient. Without Fed money, they'd be falling

out of the skies.

Just my 2 cents worth on a subject that's always been sore spot

for me.

A great holiday season to one and all.

 

[tp49]

United has threatened a bankruptcy filing for weeks now, I'd like to start the countdown or start a pool as to when they will go bankrupt, and even if they do so long as they reorganize and not go chapter 7 which liquidates the assets they can still operate under bankruptcy protection.

 

[tp49]

Seems as thought the countdown to UAL's bankruptcy will end Monday morning when a Chapter 11 petition will be filed in US Bankruptcy Court in Chicago. Also read a rumor on an aviation industry message board that stated US Airways is on the verge of a Chapter 7 filing (total liquidation of assets) meaning they would cease to operate, stay tuned for that.

 

[Amtrak Watcher]

Back in 1998 (I think it was when USAir was seeking a bailout) the subject of Amtrak vs. the airlines came up in a discussion aired on C-SPAN. Some official (elected or appointed - I wish I could remember who it was) said that the U.S. Government favors the airlines in this regard because (hold on to your hats) "Trains aren't modern." The interesting thing here is that nobody on the panel challenged this ridiculous remark. As one who deals with powerful officials (public and private) all the time, I can assure you there is lots of this kind of childish thinking going on everywhere, and you would be astonished with the number of government decisions that are based on these kinds of silly notions. Even after compiling lots of data and reading lots of expensive studies, officials tend to look for an emotional hook on which to hang their decisions. The more complex the issue the less likely the "hook" will have much of a connection with reality.