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Amtrak's $16 Burger

You can get $16 hamburgers at fancy restaurants, but it takes Big Government's Amtrak to sell hamburgers that cost that much AND incur a loss of $834 million over the past 10 years.

The secret? Amtrak sells microwaved burgers for $9.50, but pays out over $16 in food cost and labor:

Amtrak spent $1.70 for every dollar it earned on food and beverage sales last year, leading to a loss of $84.5 million on the service, according to information provided to the House Transportation and Infrastructure Committee this week.

Committee Chairman John Mica (R-FL) blasted the “inefficient and wasteful” record of the nation’s rail line, pointing out the substantial cost to taxpayers occurring with each transaction.

“Over the last 10 years, these losses have amounted to a staggering $833.8 million,” said Mica. “It costs passengers $9.50 to buy a cheeseburger on Amtrak, but the cost to taxpayers is $16.15. Riders pay $2 for a Pepsi, but each of these sodas costs the U.S. Treasury $3.40.”

Link

Update 8/10/12: The story at NY Times | GAO Report (2005) | Amtrak's own report (2011)

Transit is never free, you pay for the benefits it brings. Overall rail transit adds value (even if there a places it could be more efficient). Besides that, the amount of money wasted in spending related to roads and highways make $800 mil over ten years look like chickenfeed.
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There are a great number of things that I find shocking about this article.

First, there are the number of inaccuracies in the first sentence - not so much that they are wrong, but they are designed to mislead people. The cost analogy to a restaurant implies that's what people pay - it's contradicted in the next paragraph. I would also note that referring to it as "Big Government's Amtrak" is a pretty short-sighted view of what Amtrak's purpose was and is. It was founded in 1971 to ensure that private companies no longer had to provide a vital service to America. It may have been an expansion of government services, but solely because freight railroads all but begged for its existence.

I would also note how much it astounds me that Neatorama - a blog I go to specifically for its lack of political proclivities - would link to an overt and avowed conservative blog, without noting it. This isn't an unbiased news article from a reputable news source - you could find just as many, I am sure, apologetic liberal blogs who would be able to blame these costs on something else.

All in all, I've been a devout Neatorama reader for more than five years. And this was my first time commenting - and it will likely be my last. This is reason enough for me to stay away.
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Nfab, please feel free to refute the findings on your own blog, or perhaps provide a link to one of the apologetic liberal blogs you mention. It's good to have posts like this at Neatorama, where we can actually debate their merits. Maybe it's wrong, but it's better than the deliberately wrong Improbable Research articles.
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Amtrak isn't a business and hasn't been from day one. Providing mass transportation is a public good and it has positive externalities. If I drive from New York to Philly, and you take the train, I benefit because you aren't in front of me on the road (particularly if you're going 45 in the left hand lane). I don't know you, I'm not going to mail you a check. So I use the government to subsidize your train ride. Likewise, if you live in Rugby, ND (the geographic center of North America), or Fulton, Ky (the Banana Capital of the World- long story) among many other places, we as a society have determined that you should have affordable intercity transportation. So we subsidize it for you. Call it pork, or graft, or earmarks (unless it's in your district, in which case it's called "jobs" or "investment" or "development"), but its a choice we as a society have made. Amtrak "losses" aren't losses, they're the amount we as a society, through our elected officials, feel is necessary to provide a level of service that we have deemed appropriate.

It's also stupid to set up a false parallelism between public and private goods. Sure, we want a cheap burger on an Amtrak train. But we also want transparency so we know who the burger was purchased from. And we want equity so that the burger contract doesn't go to somebody's cousin. And we want the person who serves it to us to have a living wage. And we want the same from all of the equipment to prepare the burger (ok, it's a microwave, but I'm sure there is a "Buy American" provision). What I'm saying is, when the "government" sells you a burger, it's more than just a burger. The cost of that burger (both what the customer pays and what the taxpayer subsidizes) represents a whole host of other factors that aren't just the beef, cheese, and bread. Do fraud and waste make up a portion of the cost of that burger? No doubt, and I'm sure Amtrak is going to work on removing those, But we need to remember even then, the burger very well may still be more expensive than a McDonalds burger. Private good providers pay taxes (sometimes), but unless you are a shareholder, you don't really have any control on forcing McDonalds to provide all those other things. We're all shareholders in the government, so we use that share to advocate for the things we want to see our money go for. 
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