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Economist Chris Butler: In A Free Market, Amtrak Would Not Be Here

PHILADELPHIA (CBS) -- Economist Chris Butler of Butler Lanz & Wagler told Talk Radio 1210 WPHT morning host Chris Stigall that if Amtrak was government subsidized, it would not be here as we know it. This is, at least in part, due to the fact that the only region of Amtrak that is profitable is the Northeast Corridor. Throughout the rest of the country, the corporation loses money.

"Clearly, in a free market, Amtrak would not be here at all, because they couldn't make it on their own. So, what that would do is spark innovation, and someone would either figure out a way to make this work efficiently -- the transport of people by train or rail -- or it would fall by the wayside, because people prefer other modes of transportation."

Many detractors from Butler's opinion point to the kinds of investment that places such as Europe and China have made in their rail system and say that the United States should be more like them.

"Just because you build it, because you create money out of thin air, does not necessarily mean that the public demanded it. In fact, I would go so far as to say in China, the public hasn't demanded it, and by the way, that's the kind of problem you get with central planning gone haywire. I think the public over there would probably ask for more airports, not superfast trains going from one empty city to another."

Butler feels that with all of the money that has gone to it in the past, Amtrak should have spent its funds better.

"Like a lot of different subjects that get bandied about in Washington, D.C., that when there is a terrible accident like what just occurred in Philadelphia, you immediately start hearing people say, 'Well, we needed to have invested more in infrastructure,' and then you look at the funding that they get and the question should be, 'If infrastructure was in such a bad state and needed to be upgraded, you had $9 billion or $7 billion, what did you do with it?'"

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