Amtrak: An efficient use of subsidy!

December 29, 2005

Someone needs to introduce Amtrak to Arthur Laffer.

I think Kip Esq. may have previously touched on the subject of Amtrak, or some other regional rail-transit system and the gross amount of subsidies they absorb. They’re like subsidy sponges, really, and they keep sucking and sucking. Anyways, I’m in the process of planning my annual snowboard/ski vacation, which is probably going to cost me a lot more than I want to spend because I have my heart set on Whistler, British Columbia. But among the other venues I looked into, Killington, VT came up, and I checked on what it would cost to take the Amtrak from Toledo to Rutland or Albany, see the screen capture below:

subsidize this

Take a second look at it, and see if you can’t find the obvious problem. It will sink in.

The market handles such a situation very differently, for example, a flight from Dayton OH to Calgary, Canada via Detroit & Minn/StP is about $365.

The same flight (minus the first leg) from Detroit, to Calgary, via Minn/StP is almost $500. The free market understands that people don’t want to make extraneous stops in the middle of nowhere when they are coming home from or departing on a vacation. I’m having trouble understanding how Amtrak can justify charging a customer more while giving him less of what he wants (in this case: convenient intra-city transit.)

So naturally, the subsidies Amtrak and its kin already absorb are not sufficient enough to impress upon them that demand curves slope downwards, the only logical solution is to give them more subsidies.


Posted in: Potpourri

Comments

2 Comments so far

  1. Libertarian Jason December 30, 2005 7:12 am

    An efficient use of subsidy!

    Isn’t that an oxymoron?

  2. doinkicarus January 3, 2006 1:05 am

    < /sarcasm>

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