With Amtrak Subsidy, Taxpayers Get Taken for a Ride: New at Reason

The government is giving what The New York Times described as a “$2.45 billion loan” to Amtrak to buy new Acela trains to replace the ones that currently ride the rails between Washington, New York, and Boston. The first set of Acela trains, deployed about 15 years ago, cost about $1.2 billion; the new set will cost about twice that.

If Acela is such a great business, writes Ira Stoll, why does the federal government need to loan it money? Why can’t it raise funds the way other, competing, businesses, like airlines do, by selling bonds or issuing stock? Instead what’s happening is the government is backing one competitor in the market for travel between Boston, New York, and Washington.

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