I’ve vehemently declared my opposition to the federal stimulus plans and wasteful state construction projects. On the contrary, I’ve always stated I don’t mind government investment in vital infrastructure projects, scientific initiatives, or national security related expenditures. Hence I support targeted, intelligent alternative energy spending because I feel it adds value to our nation, while bolstering national security efforts. Look back on history and Eisenhower’s Interstate Highway System or Kennedy’s NASA program come to mind as worthwhile government investments. When Obama announced funding for a new high speed rail project, I had one of those rare moments when I said, “Wow, now this can actually be an instance of positive government action.”
For those unfamiliar with this projects, Time does a nice summary of the proposal and its pros and cons… (probably worth a read in its entirety)
Can High-Speed Rail Succeed in America?
“We want to start looking deep into the 21st century and say to ourselves, There’s no reason why other countries can build high-speed rail lines and we can’t,” Obama told a crowd in a University of Tampa arena. “Right here in Tampa, we’re building the future.”
That’s a nice sentiment, but America’s antiquated rail system will have to advance a long way just to make it to the present, let alone the future. U.S. intercity railroads are a laughingstock compared with those in most other developed nations — and, increasingly, even those in developing nations like China, which is investing more than $300 billion to build more than 16,000 miles of high-speed track by 2020.
Today you can travel the 250 miles from Paris to Lyon on the high-speed TGV in two hours. Covering a similar distance from Philadelphia to Boston takes some five hours, and that’s on an Amtrak Acela train, the closest thing the U.S. has to high-speed rail. “Every other major industrialized nation has recognized that high-speed rail is key to economic growth and mobility,” says Petra Todorovich, director of the America 2050 program at the Regional Planning Association. “It’s time for America to realize that as well.”…
Still, the initial round of $8 billion — which Biden referred to as “seed money” during his remarks in Tampa — is just a tiny percentage of what it would cost to significantly overhaul the country’s rail system. And there are concerns that by spreading the funds to so many different projects in so many different states, it won’t be possible to make a real difference in any one place, as Mark Reutter wrote in a new report for the Progressive Policy Institute. It doesn’t help that the one region that could most obviously benefit from truly high-speed rail — the Boston-to-Washington corridor — received a mere $112 million in funding, in part because building new track in the congested area would be prohibitively expensive and politically challenging.
I like trains as much as any other guy, but before I would jump into this i would like to see a market study and understand how they can operate profitably without govt help. There is a reason we don’t have inter city trains…..it’s because they don’t/can’t make money. i think over 50% of a metra commuter ticket is subisidized through tax dollars. Looks good on paper, but seems to me just another reason to spend tax dollars mucking up the free market economy. Tell me how a train between LA and Vegas makes any sense unless you are dingy harry reid……how about a train between miami and orlando. You can’t force americans to take the train…..ever been in chicago rush hour traffic danny? Personally, i think the government should stay out of things like this. Some day i may have the energy to write down what the government should be into. I am not against mass transit, but I think the way you encourage it via the market is through a $ 1 per gallon gas tax….I have posted before about my feelings on the gas tax.
Look at the European and Asian model of rail usage and we should be ashamed at the lack of investment in these services. Good point. In Europe, flights are cheap no matter where you go because of competition between rail transit systems.
This is an excellent way to put Americans back to work on desparately needed infrastructure projects. This economy needs more jobs and rail is the best way to achieve it. We should invest much more than a few billion. Florida to New York to California- Yes we can!
Say barack, if i may call you barack? The economy does need more jobs…GD right…….. but more government spending is not the way to accomplish it. Spending govt. money, which is borrowed by the way barack, on choo choo trains that nobody rides in seems a waste of money……but maybe i am missing something. If it’s such a great idea, why isn’t there gobs of private money doing it? That’s not a rhetorical question barack. Transporting people between inter city point A and B has very little effect on the overall economy. Oh, wait a minute, I know what I am missing. In the command and control government that you favor we will be forced to take the train…..now I get, we will have the government telling us how to travel from florida to new york to california…..they will create the market for the choo choos they built with borrowed money.
Here is a message barack for future reference……..most Americans don’t want to live like europeans or asians.
Profits profits!!!!everything must end in profits! The banking system was earning record profits and look where that got us. Your friends at Hallburton love those profits too and ironically its all the destructive government deregulation and warmongering that get us there, I agree with the author here. Itslike the highway system. Does this earn a profit? No but we sure don’t scrap all plans for creating necessary roads and maintaining them. This is a vital infrastructure project and we should have made this investment decades ago like every other developed country did.
Now lets see if I can get my math problem right because if I can’t add up profits then 5+14 must be tough!!!!!!
Well barack, you obviously got the math problem question right…….that’s why we have calculators. You answered your own question incorrectly though……highways do make money, airports do make money, commuter rail does make money. They all have great demand and are used in clear revenue/profit producing activities………..I can assure you, inter city rail does not. Inter city rail is a quaint and nostaglic idea and has very limited economic usefulness…..it is anything but vital infrastructure.
I don’t have the energy right now to respond to the other rants in your post.
In the interest in breaking up the excitement, I’ll weigh in. I do agree rail is grossly unprofitable no matter how you look at it. Every city rail project has been unprofitable mostly due to government subsidies in keeping things “affordable”. Likewise, doing a quick google search shows the international models are no different. With that said, I also agree profitability is not necessarily the aim. While I’m encouraged that Warren Buffett thinks the rail industry is profitable enough to invest, I don’t think it should be the primary motivation for investment. I used interstate highway as an example for a reason. We spend millions on maintenance, enforcement, and obviously on the initial infrastructure. There is no profitability in general roads but they are used enough that it creates common good. Trucks are able to utilize more efficient routes, while it provides a necessary logistical structure for all. I believe rail can achieve something similar. I think it can be an alternative to air travel and can be utilized for better business transportation efficiency. This might seem tame by today’s standards but interstate highway might have seemed unnecessary during its development. It’s no secret that our infrastructure is sorely lacking and this is actually one of the few investments government can do for improvement. Our country’s rural/suburban model is risky in an era of peak oil and rail provides a necessary alternative to the age of easy auto transportation. At the very least, this is much preferable to the waste from 95% of the rest of the stimulus plan.
so……..as long as we are wasting money……..let’s waste it in the most “preferable” fashion……….not sure I agree with that Muwabi. Why don’t you sleep on that comment and get back to us.
By the way, get off this Warren Buffett stuff……he invested in a freight railroad (not inter city) and I suspect he did if for one reason and one reason only………profits. I own Berkshire Hathaway stock and that better be what he is doing with my money;.
Warren Buffett is one of the best investors and the richest men in the world. I definitely can applause his work. really it is good to know the investment strategy of this businessman.