The U.S. ought to Privatize Amtrak

Thanks for your arguments Con. For the purpose of brevity, I'll try to keep my case short. Rebuttals "All of the leading nations in railway transportation heavily subsidize and even manage their railway system with great success." Only two high-speed rail routes in the world are profitable [1], with these routes being Tokyo-Osaka and Parisk-Lyon. The vast array of "advanced" railroad networks in France, Germany, Japan, China, etc., are not only hemorrhaging taxpayer's funds, but only account for approximately 8% of all transportation usage [2].America's subsidies to railway's is relatively equal to different nations around the world [3]: Amtrak's subsidies, as I said earlier, far exceed the subsidies for highways and air travel [3]: "Japan’s Japanese National Railways is owned by their government and is it is the most successful and advanced in the world." Your link shows nothing to support your claim. Second, Japan is a densely populated island, compared to the United States, which has a larger population diffused across thousands of miles, across deserts, rivers, mountain ranges, and different natural barriers. "Amtrak executives already ... have accomplished continuing success" As proved in R2, Amtrak has been operating at a loss for 43 years in a row. Furthermore, an operating loss of 12% indicates business failure. A business in the private sector cannot run at a major loss for more than a few years. The average American's rail usage hasn't budged in recent years [3]: "However, they can use the additional subsidy money for further development to quickly become a more successful railway mass transit system." The European experience of offering railroads abundant subsidies "suggests that there are diminishing returns to passenger rail subsidies" [3]. So if subsidies are increased by say a factor of two, ridership probably won't match the subsidy increases. "Railways can be seen as a transportation system for the future." I'd have to disagree with this claim. "Amtrak's energy efficiency" After adjusting for the fact that Amtrak's passenger's cars are underutilized, Amtrak used an average of 2,271 BTUs per passenger mile (from empirical data) [4] [3]. Furthermore, after adjusting for the fact that vehicles (in intercity travel) typically have 2.4 passengers [3], vehicles on average used fewer BTUs per passenger mile — ipso facto, vehicles overall had greater energy efficiency.Moreover, both vehicles and air travel are gaining energy efficiency much more rapidly than Amtrak, and will both exceed Amtrak within the next several years [3]: "You fail to cite sources to prove your case on how ending subsidies will result in improving Amtrak’s management." A study across 41 enterprises among 15 nations found that privatization "increased returns on sales, assets, and equity, raised internal efficiency, improved capital structure, and increased capital expenditures [5]. The World Bank summarizes saying, "privatization, when done right, works well" [5]. Amtrak would benefit from privatization because it would have the flexibility and incentives to restructure its business structure. It could shut down the 41 railway routes which operate at a loss, and invest in its 3 profitable routes in New England (source in R2). However, the federal government prohibits this. The political constraints of the gov't restricts Amtrak's potential. Consider an analogy. The Soviet Union — a massive communist state in the 20th century — had gross inefficiency and widespread poverty from state ownership of enterprise. Yet, the United States had a mostly market economy, and reached unprecedented levels of prosperity, ingenuity, and living standards. Why would we adhere to the American model for most of the economy, but when it comes to railroad usage, apply the Soviet model? Railroad usage can function using competition and devolved markets. Conclusions - Amtrak costs taxpayers over $1.5 billion every year - Amtrak has operated at a loss for over 43 years straight - Amtrak (adjusting for passenger-usage) isn't more energy efficient - Amtrak — if left in government hands — will continue to falter - Amtrak subsidies distort the economy, harming all American consumers - Amtrak would benefit operating as a private enterprise ---------- Thanks for the debate Con. Sources [1] David Randall Peterman et al., "High Speed Rail (HSR) in the United States," Congressional Research Service, December 8, 2009, p. 19. [2] “Panorama of Transport: 2009 Edition,” pp. 101, 103, 104, 105, 108. [3] (http://tinyurl.com...) [4] Transportation Energy Data Book, Edition 31 (Oak Ridge, TN: Department of Energy, 2012), table 2-14. [5] (http://tinyurl.com...)