October 3, 2017
P.O. Box 1612
Waukesa, WI 5317-1612
Re: "Time Is Up", by Bob Johnston (October 2017 edition)
In response to Mr. Johnston's article about the real impact, if any, of the government's 2009 $10 billion infusion to states and Amtrak for the benefit rail passenger service, it is obvious that this massive spending had no real long term impact. Let's just look at several reasons why:
1. The money was NOT invested by private individuals who expected to reap a decent return. It was simply a political handout with dubious goals (get America working again?...who knows?). No one ever expected that the money would be returned to the treasury with interest. And herein lies the problem. Ten billion dollars was diverted from the real economy to politically connected cronies. That's $10 billion of capital that was wasted instead of $10 billion of capital that would have been invested profitably by the private economy.
2. The states and Amtrak do NOT have a business plan for revitalizing rail service; all they have is a pie-in-the-sky wish list. Wishes are not plans. Business plans can be evaluated according to some criteria; wishes cannot be evaluated by any objective standard. Therefore, spending to satisfy wishes become nothing more than exercises in political power and political log rolling (you vote for my expenditure and I'll vote for yours. Neither of us care one whit about the soundness of these expenditures).
3. Amtrak will NEVER be profitable until it is privatized. The only way to determine whether Amtrak can be profitable is for people to invest their own money with an expectation that it will be returned to them with interest. If no one wishes to purchase Amtrak, then Amtrak should be shut down, pure and simple. To keep it going under the present conditions requires a constant infusion of public money, which represents a diversion of capital from sound investments. Instead of capital accumulation via private investment, America suffers capital consumption. It is akin to spending one's savings on personal consumption instead of investing in productive assets. Instead of a future of independence and dignity, one finds oneself living as a dependent of some sort (relatives, the government, private charity).
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