See whether this scenario sounds familiar: A nation pumps huge amounts of taxes into its government-run passenger rail service for years. Yet the rail service regularly loses money. Even though the country has enormous debt, it continues subsidizing the railroad – and the railroad continues losing money.
We are talking about Greece’s government-controlled railroad, but if you have read much about America’s Amtrak passenger rail service, you realize we could just as easily be describing Amtrak.
In nearly four decades of existence, Amtrak has never broken even. Most Americans never step foot on an Amtrak train and appear to have little interest in doing so. Yet, like Greece, our government continues to shower Amtrak with generous, multibillion-dollar subsidies. In other words, Congress rewards Amtrak’s failure and punishes the vast majority of Americans who do not ride Amtrak, by forcing them to subsidize ticket prices for the few who do.
But unlike our Congress, Greece’s government is fed up with its money-losing railroad and plans to do something about it. Greece’s collapsing, debt-heavy economy recently had to be bailed out with enormous loans from the European Union and the International Monetary Fund. So among other remedial actions, Greece’s government plans to overhaul the railroad in radical ways, saying it needs to cut 2,500 jobs and reduce the railroad’s more than $10 billion debt.
“For years [the state railway] operated as an organization that unfortunately multiplied the country’s deficits while providing a very poor quality of services,” Greece’s Prime Minister George Papandreou recently told his Cabinet, as he announced reform plans.
Why doesn’t the U.S. government take a cue from Greece and reform Amtrak? Why should taxpayers have to keep subsidizing a service that is extremely unpopular and that has cost us tens of billions of dollars? Amtrak is also unconstitutional, as the Constitution makes no provision for the federal government to be in the passenger rail business.
Those considerations, plus our country’s staggering debt, should be all the reason we need to sell off Amtrak’s few profitable lines to the highest free-market bidders and shut down the rest.