A bloated, inefficeint, money losing venture that few people want? Sign me up!

With Amtrak, the government got too involved in decision-making, leading to inefficiencies in the system that would never be corrected, say analysts. Since its creation in 1970, Amtrak has sucked up $30 billion in taxpayer money, and the money is still flowing. The original aid package from Congress in 1970 was $340 million with an expectation the railroad would make a profit in five years.

The potential parallels are worth being concerned about, critics say.

"I think the $50 billion might as well be kissed goodbye. I would expect that this is just the beginning," Cox, principal at the Wendell Cox Consultancy, said of the GM deal.

"I think the long-term outcome will be the same," said Ronald Utt, a senior research fellow at the conservative Heritage Foundation. "It's unlikely to ever recover the huge investment that's been made in it, and you will then be carrying this forever and ever and ever. (The government has) been carrying Amtrak now for more than 35 years."

Conservatives in Washington treated Monday's announcement with a hefty dose of skepticism. They called for a clearly stated exit strategy and said GM's success is by no means assured.

"Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability?" House Minority Leader John Boehner said in a written statement.

Though the rhetorical question might sound like a recycled GOP talking point, the analysts who spoke to FOXNews.com say the fear is justified. The government will have a hard time resisting getting closely involved in GM management, leading to the kind of problems that dogged Amtrak over the decades.

Utt and Cox said parochial, political interests have driven Amtrak to make ineffective decisions -- like maintaining costly, long-distance lines and setting up inefficient routes that detour through low-population areas.

Amtrak has experienced a boost in ridership recently, which its management attributes in part to high gas prices and better service. Though it is still in the red, Amtrak reported a record 28.7 million passengers in fiscal year 2008, marking its sixth straight year of record ridership.

The company notes on its fact sheet that "no country in the world operates a passenger rail system" without public support.

At the same time, Amtrak reported earning $2.45 billion in fiscal year 2008, and racking up $3.38 billion in expenses. Congress last year committed another $13 billion over five years to the rail service, with proponents of the investment saying at the time that the service had been underfunded for too long and this would finally help "rebuild" Amtrak.

Great. Just fucking great!

Posted by: eddiebear at 04:12 PM | Comments (1) | Add Comment
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