How to Pay for Amtrak’s Deficits

Amtrak operations lost $1.2 billion last year without even counting depreciation and the other costs that Amtrak pretends aren’t real. (The $1.2 billion is calculated by adding $885 million “adjusted operating earnings” to the $329 million “state supported train revenue” that Amtrak pretends isn’t a subsidy.) A railroad in Japan provides an example of one way Amtrak could cover this deficit.

The Choshi Electric Railway hit some hard times in the 1990s, as did most Japanese businesses, due to the nation’s economic slump. The railway almost went out of business, but then it hit upon the idea of asking its customers and patrons to buy rice crackers. Today, it makes twice as much money on its rice crackers than on the rail line itself.

Choshi is much smaller than Amtrak as its line is just 6.4 kilometers long and serves ten towns along that route. In Inuboh, one of the cities on the route, a baker makes rice crackers then soaks them in soy sauce, creating an unusually moist cracker. Customers can buy them fresh out of the oven at Inuboh or buy them in packages at any station along the route as well as various supermarkets and on line including at Amazon. The crackers come in at least three flavors: bonito (fish), kombo (kelp), and sweet.

If Choshi can do it, so could Amtrak. Amtrak should make something, perhaps fig newtons or something else that will appeal to its fan base, and ask them to buy it to keep the trains running. At the very least, we’ll find out how much people who say the want Amtrak to keep running really care about the business.

Even with a successful product, Amtrak might not be able to keep all of its trains running. Although selling rice crackers saved Choshi from going out of business, it didn’t save it from having to reduce its service. Although the railway used to operate two or three trains an hour, since 2013 it has been able to operate only one train per hour during the daytimes. Maybe, if Amtrak sells enough fig newtons, it will be able to keep a few of its daily New York-Washington trains running.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

2 Responses to How to Pay for Amtrak’s Deficits

  1. LazyReader says:

    Want more train riders, make America Scenic Again.

    Since most amtrak riders are seasonal, Company make sufficient use, by operating exactly as they should. Increase availability of access to tourism friendly destinations and make their existing destinations more tourist friendly. That’s why most US tourism train rides are natural scenic areas, not it’s urban areas.

    https://www.timeout.com/usa/things-to-do/most-scenic-train-rides-in-america

    U.S. cities beyond the Appalachian Mountains often look different from cities east of the mountains. The reason is: Jefferson. The Midwest grew up under the influence of Jefferson’s grid system, which he developed under the influence of European Enlightenment thinkers. (The third president of the U.S. was a major student of European architecture. If you visit his house in Virginia, it’s kind of like visiting a Roman temple.) So in a way, the classic American “grid” cities are totally European in inspiration — with the caveat that they only rarely have an equivalent in labyrinthine Europe.

    WHich would you rather visit? That’s why tourists don’t flock here….
    https://placesjournal.org/wp-content/uploads/2014/11/Esperdy-featured-Ugly-America.jpg

    they flock here….
    https://media.cnn.com/api/v1/images/stellar/prod/190709173102-10-beautiful-european-cities-few-tourists-bern.jpg?q=w_4946,h_2782,x_0,y_0,c_fill/w_1280

  2. Henry Porter says:

    Let’s think about this for a minute. We are actually talking about devising a scheme to divert profits from something that people actually want enough to pay the more than the cost of producing it (crackers and cookies?!), to pay for something else that not enough people want enough to pay the actual cost of producing it (Amtrak).

    How did America reach the point where we are willing to spend $13.2 billion a year to operate a train system that, for all intents and purposes, nobody wants?

    Why don’t we just put Amtrak out of its fu@king misery?

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