Topic: The Amtrak Lesson | |
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Let's look at the government take over of Amtrak - this could happen to GM and Chrysler or health care
******************************* "The U.S. Transportation Department took over a group of overregulated private railroads that were bankrupt. The department wrote of Amtrak, “It is expected that the corporation would experience financial losses for about three years and then become a self-sustaining enterprise.” No, the above statement wasn’t a joke. Or maybe — given Amtrak’s 35 years of massive red ink — the joke is on all of us who pay taxes. *********************** All of Amtrak's preferred stock is owned by the U.S. federal government. The members of its board of directors are appointed by the President of the United States and are subject to confirmation by the United States Senate. Common stock was issued in 1971 to railroads that contributed capital and equipment; these shares convey almost no benefits[2] but their current holders[3] declined a 2002 buy-out offer by Amtrak.[4] Amtrak commenced operations in 1971 with $40 million in direct Federal aid, $100 million in Federally insured loans, and a somewhat larger private contribution.[52] Officials expected that Amtrak would break even by 1974, but those expectations proved unrealistic and annual direct Federal aid reached a 17-year high in 1981 of $1.25 billion.[53] During the Reagan administration, appropriations were halved. By 1986, Federal support fell to a decade low of $601 million, almost none of which were capital appropriations.[54] In the late 1980s and early 1990s, Congress continued the reductionist trend even while Amtrak expenses held steady or rose. Amtrak was forced to borrow to meet short-term operating needs, and by 1995 Amtrak was on the brink of a cash crisis and was unable to continue to service its debts.[55] In response, in 1997 Congress authorized $5.2 billion for Amtrak over the next five years—largely to complete the Acela capital project—on the condition that Amtrak submit to the ultimatum of self-sufficiency by 2003 or liquidation.[56] Amtrak made financial improvements during the period, but ultimately did not achieve self-sufficiency. In 2004, a stalemate in Federal support of Amtrak forced cutbacks in services and routes as well as resumption of deferred maintenance. In fiscal 2004 and 2005, Congress appropriated about $1.2 billion for Amtrak, $300 million more than President George W. Bush had requested. However, the company's board requested $1.8 billion through fiscal 2006, the majority of which (about $1.3 billion) would be used to bring infrastructure, rolling stock, and motive power back to a state of good repair. In Congressional testimony, the Department of Transportation's inspector-general confirmed that Amtrak would need at least $1.4 billion to $1.5 billion in fiscal 2006 and $2 billion in fiscal 2007 just to maintain the status quo. In 2006, Amtrak received just under $1.4 billion, with the condition that Amtrak would reduce (but not eliminate) food and sleeper service losses. Thus, dining service were simplified and now require two fewer on-board service workers. Only Auto Train and Empire Builder services continue regular made onboard meal service. In October 2007, the Senate passed S-294, "Passenger Rail Improvement and Investment Act of 2007" (70–22) sponsored by Senators Frank Lautenberg and Trent Lott. Despite a veto threat by President Bush, a similar bill passed the House on June 11, 2008 with a veto-proof margin (311–104).[59] The final bill, spurred on by the September 12 Metrolink collision in California and retitled "Rail Safety Improvement Act of 2008", was signed into law by President Bush on October 16, 2008. The bill appropriates $2.6 billion a year in Amtrak funding through 2013.[60] The stimulus package gave Amtrak 1.3 billion more. $$$$$$$$$$$$$$$$$$$$$$$$ This proves pretty much that anything the government runs will never benefit the taxpayers because in thirty years the government has operated Amtrak at a loss. A private company would be bankrupt and knows better than to continue putting money in a HOLE. The government doesn't have to learn that lesson - the taxpayers do. The Post Office is run the same way....... *INFO ABOVE from Wikipedia* |
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And have you seen the prices on Amtrak? It's almost always cheaper to fly and time-wise, you're almost always better off flying or driving yourself.
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