The U.S. ought to Privatize Amtrak

Thanks for accepting Con, you seem to be a very worthy opponent. I'll put forth my arguments supporting the privatization of Amtrak. C1: Reduces Wasteful Spending One reason Amtrak should be privatized is because the federal subsidies are simply a waste of money. The Amtrak Corporation — funded by the federal government — has "generated huge losses... each and every year of its existence" [1]. In FY2015 alone, U.S. taxpayers are projected to spend $1.5 billion for Amtrak subsidies [2]. The federal government, which has overspent its revenue by over $630 billion in this year alone [3], should cut unnecessary expenditures. C2: Improves the Economy The economy can be defined as, "the aggregate activities of production and consumption which determines the allocation of scarce resources" [4]. The U.S. has a market economy, where consumers decide the production and consumption patterns of the U.S. economy. To imagine, consider the case of shirts. If consumers increase their aggregate demand for shirts, profits will signal this shortage, and suppliers will respond promptly by increasing their production of shirts, until supply matches demand. The efficiency of the market economy is exceptional. The Amtrak subsidies distort the economy. The federal gov't directs more resources to rail transportation than would be desired by consumers. The result is inefficiency. Consequently, the cost of products throughout the economy is manipulated -- resources have been wasted on a government project (Amtrak). ----------Important Information---------- In the current United States, the government subsidizes many modes of transportation. However, utilizing the Bureau of Transportation statistics, Amtrak subsidies "per-passenger mile... [are] nearly 9 times [the] subsidies to air travel and nearly 22 times subsidies to highway travel" [5] [6] [7]. Therefore, by privatizing Amtrak and 'equalizing' subsidy levels across the transportation industry, prices will be less distorted, consumers' preferences will be more clearly conveyed, and the allocation of resources will more accurately reflect the preferences of America's consumers. In other words, the economy will gain efficiency as wasteful subsidies are eliminated. C3: Improves Energy Efficiency Amtrak is less energy efficient than different modes of transportation. The Congressional Research Service found that cars use less energy than Amtrak [8], due to the fact that Amtrak has many empty passenger cars. Due to the fuel economy standards implemented in the last several years, light trucks will also have lower energy consumption than Amtrak in the near future[9]. Also, since airline energy efficiency has grown at approximately 3.1% per year (compared to Amtrak's rate of 1.3%), airlines will become more energy efficient than Amtrak by 2023 [10]. Furthermore, empirical evidence from the Congressional Research Service and another independent institution found that intercity buses use about 60% less energy than Amtrak [11]. Therefore, by eliminating Amtrak subsidies, it will lead consumers to utilize different modes of transportation, which will thereby increase energy efficiency and reduce polluntants in our atmosphere. C4: Improves Amtrak's Corporate Structure The private sector is more efficient than the public sector. This fact is due to several principles, such as (1) Productive behavior is aligned with profit (2) Individuals confront the consequences of their decisions (3) Decision-making is devolved to the most effective parties Allowing Amtrak to have private governance would allow Amtrak the opportunity to have a flexible, innovative business design, which would spur profitability and increase efficiency, both for the enterprise and the economy as a whole. An independent analysis of Amtrak's operations found that 41 of Amtrak's 44 routes were losing cash in 2008 [13]. Furthermore, despite charging $16 per hamburger [12], Amtrak still hemorrhages cash. The notion that government can run a railway better than the private sector is absurd. Conclusion Amtrak currently consumes $1.5 billion in taxpayer money every year, with no end in sight. This has been Amtrak's track record for over forty years straight. This is simply another instance of wasteful government spending. Privatizing Amtrak is not only (1) fiscally responsible, (2) good for passengers, (3) good for the American people, and (4) good for energy policy, but will allow Amtrak, as a private enterprise, to gain the efficiency, flexibility, and tools to reinvent its approach, and to build an image of success, instead of an image of failure and perpetual disappointment. Sources: [1] (http://tinyurl.com...) [2] (http://tinyurl.com...) [3] The Budget and Economic Outlook, Fiscal Years 2013 and 2023, PDF. [4] (http://tinyurl.com...) [5] (Calculated from National Transportation Statis­tics, tables 1-40 (“Passenger Miles”), 3-33 (“Trans­portation Revenues by Mode and Level of Govern­ment”), and 3-37 (“Transportation Expenditures by Mode and Level of Government”) [6] (Calculated from National Transportation Sta­tistics, tables 1-40, 3-33, and 3-37; passenger miles based on light-duty vehicles, motorcycles, and buses from table 1-40. ) [7] (Calculated by taking 'total Amtrak subsidies [2]' and dividing this figure by 'total passenger miles [6]'. [8] Stephen J. Thompson, “Amtrak and Energy Conservation in Intercity Passenger Transporta­tion,” Congressional Research Service report 96- 22E, September 3, 1996, p. 1. [9] The White House, “Administration Final­izes Historic 54.5 MPG Fuel Efficiency Stan­dards,” news release, August 28, 2012, tinyurl. com/94v3e2a. [10] Transportation Energy Data Book, Edition 31 (Oak Ridge, TN: Department of Energy, 2012), table 2-14. [11] Thompson, p. 1; Transportation for Tomor­row: Report of the National Surface Transportation Revenue and Policy Study Commission (Washington: Department of Transporation, 2007), p. 3-20. [12] (http://tinyurl.com...) [13] (http://tinyurl.com...)