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Amtrak Needs Privatization, Not More Subsidies

May 18, 2015

By Jeffrey Dorfman

Last week witnessed a tragic train derailment on the Amtrak line that connects major East Coast cities. While the exact cause of the accident is not known yet, within two days liberal politicians had seized on the occasion to demand larger subsidies for Amtrak. In fact, the events of last week show the precise opposite-Amtrak should not receive a larger subsidy, but rather should be sold off and privatized.

Currently, Amtrak receives more than $1 billion in funding from Congress although it still manages to lose money. Amtrak was in the process of completing the installation of a new safety system called positive train control which should prevent exactly the sort of accident that just occurred. While Amtrak could certainly have finished installing better safety systems sooner, the delay cannot be blamed on lack of federal funding.

First, Amtrak had the physical components of the positive train control system in place on the line where the accident happened and was waiting to acquire the spectrum needed to operate the system. Money was not delaying the project; it was a simple case of bureaucracy moving slowly. Second, Amtrak can always get more money by raising ticket prices; more federal subsidies are not their only option for increased revenue. In fact, Amtrak is in the process of raising prices right now. Third, the line on which the accident occurred actually makes money for Amtrak. Normal businesses would invest to protect their money-making products...

Read the full article at RealClearPolitics.com: Amtrak Needs Privatization, Not More Subsidies

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