The High Speed Rail Folly

Mar 15th, 2011 | By | Category: Politics & Current Events

President Obama recently presented his budget to the Congress and, as a part of this budget, he is launching an initiative for a high speed rail network for the United States.  Indeed, VP Joe Biden, with great fanfare, announced the administration?s plan in Philadelphia to spend $53 billion over six years for a ?national high-speed rail system.?  Economist Robert Samuelson cogently concludes that ?The administration would pay states $53 billion to build rail networks that would then lose money?lots?thereby aggravating the budget squeezes of the states or federal government, depending on which covered the deficits.?  In fact, Transportation Secretary Ray LaHood now estimates that the administration?s ultimate goal?to bring high-speed rail to 80% of the population?could cost $500 billion over 25 years.  Samuelson evaluates the inherent risks and dangers of this high-speed rail proposal of Obama?s administration:

  1. Passenger rail service inspires wishful thinking.  In 1970, Congress created Amtrak, a system to preserve intercity passenger trains, with the idea that it would become profitable and self-sustaining.  This has never happened!  Amtrak has swallowed $35 billion in subsidies, which are actually increasing by $1 billion per year.  In fact, Amtrak actually does not provide low-cost transportation.  If you plan to travel from Washington, D.C. to New York, for example, an Amtrak fare would cost $139 one way, while a private bus service would cost you $21.50.  Further, as Samuelson notes, ?Nor does Amtrak do much to relieve congestion, cut oil use, reduce pollution or eliminate greenhouse gases.  Its traffic volumes are simply too small to matter.?  In 2010, Amtrak carried 29.1 million passengers for the entire year.  That reflects about 4% of annual air travel (725 million passengers).  Further, it is roughly a quarter of daily automobile commuters (124 million in 2008).  Measured by passenger-miles traveled, Amtrak represents one-tenth of 1% of the national total.
  2. Those who support subsidizing passenger rail service argue that such subsidies offset the huge government support of highways and airways.  This, they suggest, levels the playing field.  In fact, in 2004, the Transportation Department evaluated federal transportation subsidies from 1990-2002.  It found passenger rail service had the highest subsidy ($186.35 per thousand passenger miles) followed by mass transit ($118.26 per thousand passenger miles).  By contrast, drivers received no net subsidy; their fuel taxes more than covered federal spending.  Subsidies for airline passengers were about $5 per thousand miles traveled.
  3. To recoup initial capital costs?construction and train purchases?ticket prices would have to be set so high that few people would choose rail.  Lower prices would undoubtedly not cover costs.  So, the government would need to heavily subsidize the system.  Indeed, most current mass-transit systems run regular deficits, despite high ridership.
  4. The reasons why passenger rail service does not work are obvious?interstate highways; suburbanization has fragmented destination points; and air travel is quicker and more flexible for long distances.
  5. Even if ridership increased fifteen-fold over Amtrak levels, the effects on congestion, national fuel consumption and emissions would still be trivial.

Samuelson powerfully concludes that ?Governing ought to be about making wise choices.  What?s disheartening about the Obama administration?s embrace of high-speed rail is that it ignores history, evidence and logic.  The case against it is overwhelming. . . High-speed rail is not an ?investment in the future?; it is mostly a waste of money.  Good government cannot solve all our problems, but it can at least not make them worse.?

See Robert Samuelson?s most helpful essay in the Washington Post (14 February 2011).


Comments Closed

One Comment to “The High Speed Rail Folly”

  1. Dean says:

    Just the fact that it has to be subsidized proves it doesn’t work. If it was something the people wanted then they would gladly be using the mass transit systems already afforded them. This “huge demand” would then warrent the building of a high speed rail system with out any government intervention. In fact private industry would already have the plans, money, and purchased land to begin. A true “shovel ready project.” Of course that would mean that free enterprise would be working like it is suppose to, and we can’t have that. People would be profitting for the sake of “greed” instead of creating something strictly for the good of the people. Hold on to your hats! here comes the “Volks-train.”