It is ironic that there is a simmering debate over the symbolism of a flag as Americans prepare to celebrate the Fourth of July, a day for displaying our nation's colors. Like the Confederate flag, Old Glory has not escaped criticism and has often been the object of scorn, too.
Many times in the nation's history, desecrating the American flag has been a popular form of protest both at home and abroad. The red-white-and-blue banner has been burned, stomped, shredded, ripped and spat upon. Yet it still flutters undaunted from standards across the U.S. and overseas.
The colors of the flag have stood the test of time. Since 1777, when it was officially adopted, the banner has undergone a series of revisions. But its colors have remained intact, a scared reminder of our founding fathers vision for a new country built on the cornerstone of the rights of a free people.
Those colors were not chosen by happenstance. The hues were selected after much deliberation, according to Charles Thompson, the secretary to the First Continental Congress. Thompson, born in Ireland, emigrated with his Protestant family to the colonies to escape religious persecution.
He opposed British rule and became a patriot in the cause to chisel a new nation. His name appears on many early historic documents, such as the Declaration of Independence. Thompson was a trusted ally of a host of America's revolutionary heroes, including George Washington.
In writing about the American flag, Thompson penned the following: "white signifies purity and innocence; red, hardiness and valor; blue, the color of the Chief (God); and the broad band above the stripes signifies vigilance, perseverance and justice."
When Thompson jotted those words, this country was far different from today. His description would have been saluted by most in America. In today's era of political correctness, many would object to Thompson's characterization of the flag as militaristic, religiously offensive and jingoistic.
Some would call that a sign of progress or tolerance. However, it is a sad commentary on the current state of affairs. America's colors, once a proud badge for every citizen, are viewed by a growing number of Americans as a symbol of a past best forgotten because of the country's perceived sins.
But in the throes of great national despair, the flag still serves as a rallying point for the nation. Think back to the horrific events of September 11th, Flags sprouted on churches, on office buildings, in front yards and on highway overpasses. It united Americans in their resolve to rebound from the attacks.
Let's hope it doesn't take another dark day to remind Americans that Old Glory still represents freedom. The plethora of diverse and often contentious views expressed by Americans are the fruits of a nation founded on the right of free speech. That freedom even extends to dishonoring the flag.
Americans have died under the banner of the flag protecting the country and securing the freedom of others facing oppression. The flag has also proudly flown in times of peace and triumph. It is a symbol of everything that is admired about America.
Charles Thompson's narrative about the virtues of the flag's colors ring true even today. This is still a country of hardy individuals, who are vigilant and persevering, even in the face of economic, cultural and constitutional challenges. They are bound by a common duty to each other.
Take the opportunity this Fourth of July to show your colors. Fly the flag as a symbol of hope and liberty to many abroad and to citizens of the United States. There is no flag like the red-white-and-blue because no other nation has done more to protect and defend human rights than America.
May that grand old flag forever wave over a free people.
Monday, June 29, 2015
Saturday, June 20, 2015
The Clever Pope and the Gullible Media
The American media has been circling like vultures for months in anticipation of Pope Francis' pronouncement on climate change. Never before have journalists waited with such feverish anticipation for a simple letter from a 78-year old, white-clad pontiff.
When the news finally broke, the media erupted into a chorus of full-throated "hosannas." Finally, someone in religious authority stepped into the breach of the debate over the environment and declared that climate change was real and likely caused by humans.
Forget scientific rigor. This is the pope, the leader of 1.2 billion Catholics worldwide. Despite his lack of scientific credentials, he is the moral authority that liberals have needed to shore up their effort to legitimize climate models as gospel truth. Now there can no longer be debate.
As a result of his encyclical (a fancy word for a papal letter), Pope Francis is being celebrated in the media as a theological giant. A man untethered to the past, a modern eminence whose beliefs are in sync with a secular world's point of view. All hail Pope Francis.
But this Argentine pope has a way of tantalizing the media with solemn assurances of theological evolution, only to follow with a course correction that obliterates the original message. Those praising the pope today are cautioned to wait a few months before leaping on the papal bandwagon.
For example, in 2013 the pope caused quite a stir over the church's position on gay marriage. Asked about homosexuality, the pontiff replied, "Who am I to judge?" The media greeted the quote with headlines breathlessly proclaiming the Catholic Church had changed its stance on same sex marriage.
After news coverage faded, Pope Francis made it clear the church rejected the idea of gay marriage, calling it "anthropological regression." He went further, declaring gay adoption to be off limits, too. His words wilted on the theological vine without so much as a nod from the media.
On another occasion, this same pope told reporters that Catholics should not feel compelled to breed "like rabbits." This was greeted as earth-shattering evidence of a new church attitude on contraceptives. Later, Pope Francis quietly reaffirmed the decades-old ban on artificial birth control.
This has become a familiar pattern for Pope Francis. He signals shifts in the church's policy with clever quotes that a gullible media heralds as new dogma. But this is just part of the pope's genuine outreach to convince people the church wants to be more inclusive.
To make his point, Pope Francis has adopted a conciliatory tone on controversial subjects. He doesn't condemn a gay person. At the same time, he has not changed his viewpoint on traditional marriage. The media hasn't caught on yet. Journalists are convinced he is the liberal pope they have wanted.
That's why Catholics and non-Catholics alike are advised to not overreact to the pope's position on climate change. His words have a way of sounding like fundamental tenets when the pope is only acknowledging the other side of a moral issue. This is clear to those who have read his papal letter.
Pope Francis wants to be viewed as a transformative figurehead. He got rid of the ghastly pope-mobile. He shunned the luxurious papal apartments for a more modest residence. He washed the feet of a Muslim woman. He has a Twitter account, for God's sake.
But these are only symbols of change. The real test will be what Pope Francis not only says but what doctrinal changes he authors in the coming months and years. If the church's teachings remain intact, the media's praise for Pope Francis' manifestos will quickly turn into withering criticism.
Today's papal saint could become tomorrow's holy theological terror.
When the news finally broke, the media erupted into a chorus of full-throated "hosannas." Finally, someone in religious authority stepped into the breach of the debate over the environment and declared that climate change was real and likely caused by humans.
Forget scientific rigor. This is the pope, the leader of 1.2 billion Catholics worldwide. Despite his lack of scientific credentials, he is the moral authority that liberals have needed to shore up their effort to legitimize climate models as gospel truth. Now there can no longer be debate.
As a result of his encyclical (a fancy word for a papal letter), Pope Francis is being celebrated in the media as a theological giant. A man untethered to the past, a modern eminence whose beliefs are in sync with a secular world's point of view. All hail Pope Francis.
But this Argentine pope has a way of tantalizing the media with solemn assurances of theological evolution, only to follow with a course correction that obliterates the original message. Those praising the pope today are cautioned to wait a few months before leaping on the papal bandwagon.
For example, in 2013 the pope caused quite a stir over the church's position on gay marriage. Asked about homosexuality, the pontiff replied, "Who am I to judge?" The media greeted the quote with headlines breathlessly proclaiming the Catholic Church had changed its stance on same sex marriage.
After news coverage faded, Pope Francis made it clear the church rejected the idea of gay marriage, calling it "anthropological regression." He went further, declaring gay adoption to be off limits, too. His words wilted on the theological vine without so much as a nod from the media.
On another occasion, this same pope told reporters that Catholics should not feel compelled to breed "like rabbits." This was greeted as earth-shattering evidence of a new church attitude on contraceptives. Later, Pope Francis quietly reaffirmed the decades-old ban on artificial birth control.
This has become a familiar pattern for Pope Francis. He signals shifts in the church's policy with clever quotes that a gullible media heralds as new dogma. But this is just part of the pope's genuine outreach to convince people the church wants to be more inclusive.
To make his point, Pope Francis has adopted a conciliatory tone on controversial subjects. He doesn't condemn a gay person. At the same time, he has not changed his viewpoint on traditional marriage. The media hasn't caught on yet. Journalists are convinced he is the liberal pope they have wanted.
That's why Catholics and non-Catholics alike are advised to not overreact to the pope's position on climate change. His words have a way of sounding like fundamental tenets when the pope is only acknowledging the other side of a moral issue. This is clear to those who have read his papal letter.
Pope Francis wants to be viewed as a transformative figurehead. He got rid of the ghastly pope-mobile. He shunned the luxurious papal apartments for a more modest residence. He washed the feet of a Muslim woman. He has a Twitter account, for God's sake.
But these are only symbols of change. The real test will be what Pope Francis not only says but what doctrinal changes he authors in the coming months and years. If the church's teachings remain intact, the media's praise for Pope Francis' manifestos will quickly turn into withering criticism.
Today's papal saint could become tomorrow's holy theological terror.
Monday, June 15, 2015
The Government's Cruel Tax on the Dead
President Ronald Reagan famously said the government's view of the economy could be summed up in a few words. "If it moves, tax it," he laughed. But he could have added, Washington's insatiable appetite for Americans' money includes taxing things that don't budge, such as dead people.
Your government, not content with emptying your pockets while you are still breathing, uses its greedy hands to seize a large portion of your life's savings and other property after the undertaker has lowered your corpse into the earth.
Appropriately, this form of confiscation is known as the death tax. However, the government prefers to euphemistically refer to it as an estate tax because it promotes the idea that the levy applies only to grand mansions and obscene fortunes.
For that reason, many Americans never worry about this odious tax. They erroneously assume it only impacts those rich fat cats Democrats love to demagogue. The dirty little secret is that the death tax's grisly tentacles touch far more farmers, ranchers and small business owners than the wealthy.
First, a history lesson is in order. A form of the death tax was collected as far back as 1797 on bequests left by individuals. It ranged from 25 cents to $100, depending on the size of the inheritance. The tax was repealed in 1802 and reinstated and abolished over the decades.
The modern death tax was enacted in 1916. Currently, individuals with estates worth more than $5.43 million, or couples with $10.87 million in assets, are socked with a 40 percent tax. Additionally, 19 states, plus the District of Columbia, double dip, assessing their own death tax.
Democrats claim this is some form of social justice. Nonsense. This is nothing more than a way to punish the successful, while stoking animosity and envy toward the wealthy. No amount of justification for the tax, however, changes the reality that most super rich avoid paying the levy.
Those with means use a range of legal gambits to circumvent the death tax. Armed with accountants, lawyers and financial advisers, they use insurance policies, gift transfers, complex trusts and tax free investments to enable them to pass on their wealth to their families and charities.
That's the irony of the death tax. Democrat propaganda is aimed at convincing the uniformed and their sheep-like followers that anyone opposed to the tax is looking out for the evil rich, not the middle class. The facts, of course, offer a totally different picture.
It is hard-working entrepreneurs, dedicated farmers, risk-taking small business owners and dogged ranchers who are hit the hardest. They have spent their entire lives building businesses for their offspring to operate at their death, only to find out the government snatches 40 percent of it.
As a result, their children and grandchildren are forced to sell off hefty chunks of the inheritance just to pay the bloodthirsty Internal Revenue Service. In the end, they are left with a shell of the original land or business. More often, their only option is to get rid of the entire inherited estate.
The death tax issue looms large on the radar in states like North Dakota and Texas, where drilling for shale oil has suddenly propelled the value of rural farms. What was once fallow farm land, is worth millions of dollars. That is creating worries for farmers who want to leave their land to their families.
For once, a few in Washington appear to be attuned to their plight. In April, the House of Representatives approved a bill to repeal the death tax, which has generated $269 billion over the last 10 years. It was approved on a vote of 240-179, largely along party lines.
Naturally, President Obama acrimoniously accused Republicans of catering to the wealthy by eliminating the tax. The narcissistic president couldn't resist adding , "I don't need a tax cut." Well, the rest of us don't live rent-free in a mansion, fly on government aircraft and have a personal chef.
Despite the House vote, the death tax repeal faces an uncertain future in the Senate. At last count, there were 53 Senators who supported the legislation. Seven more are needed to get the law changed.
No family should have to visit the undertaker and the tax collector on the same day. Make your voice heard on this issue before it's too late. One day your children, grandchildren or even great grandchildren will thank you for your foresight.
Your government, not content with emptying your pockets while you are still breathing, uses its greedy hands to seize a large portion of your life's savings and other property after the undertaker has lowered your corpse into the earth.
Appropriately, this form of confiscation is known as the death tax. However, the government prefers to euphemistically refer to it as an estate tax because it promotes the idea that the levy applies only to grand mansions and obscene fortunes.
For that reason, many Americans never worry about this odious tax. They erroneously assume it only impacts those rich fat cats Democrats love to demagogue. The dirty little secret is that the death tax's grisly tentacles touch far more farmers, ranchers and small business owners than the wealthy.
First, a history lesson is in order. A form of the death tax was collected as far back as 1797 on bequests left by individuals. It ranged from 25 cents to $100, depending on the size of the inheritance. The tax was repealed in 1802 and reinstated and abolished over the decades.
The modern death tax was enacted in 1916. Currently, individuals with estates worth more than $5.43 million, or couples with $10.87 million in assets, are socked with a 40 percent tax. Additionally, 19 states, plus the District of Columbia, double dip, assessing their own death tax.
Democrats claim this is some form of social justice. Nonsense. This is nothing more than a way to punish the successful, while stoking animosity and envy toward the wealthy. No amount of justification for the tax, however, changes the reality that most super rich avoid paying the levy.
Those with means use a range of legal gambits to circumvent the death tax. Armed with accountants, lawyers and financial advisers, they use insurance policies, gift transfers, complex trusts and tax free investments to enable them to pass on their wealth to their families and charities.
That's the irony of the death tax. Democrat propaganda is aimed at convincing the uniformed and their sheep-like followers that anyone opposed to the tax is looking out for the evil rich, not the middle class. The facts, of course, offer a totally different picture.
It is hard-working entrepreneurs, dedicated farmers, risk-taking small business owners and dogged ranchers who are hit the hardest. They have spent their entire lives building businesses for their offspring to operate at their death, only to find out the government snatches 40 percent of it.
As a result, their children and grandchildren are forced to sell off hefty chunks of the inheritance just to pay the bloodthirsty Internal Revenue Service. In the end, they are left with a shell of the original land or business. More often, their only option is to get rid of the entire inherited estate.
The death tax issue looms large on the radar in states like North Dakota and Texas, where drilling for shale oil has suddenly propelled the value of rural farms. What was once fallow farm land, is worth millions of dollars. That is creating worries for farmers who want to leave their land to their families.
For once, a few in Washington appear to be attuned to their plight. In April, the House of Representatives approved a bill to repeal the death tax, which has generated $269 billion over the last 10 years. It was approved on a vote of 240-179, largely along party lines.
Naturally, President Obama acrimoniously accused Republicans of catering to the wealthy by eliminating the tax. The narcissistic president couldn't resist adding , "I don't need a tax cut." Well, the rest of us don't live rent-free in a mansion, fly on government aircraft and have a personal chef.
Despite the House vote, the death tax repeal faces an uncertain future in the Senate. At last count, there were 53 Senators who supported the legislation. Seven more are needed to get the law changed.
No family should have to visit the undertaker and the tax collector on the same day. Make your voice heard on this issue before it's too late. One day your children, grandchildren or even great grandchildren will thank you for your foresight.
Monday, June 8, 2015
CPI Hoax: How the Feds Mask Inflation
Like many government statistics, the Consumer Price Index, has been manipulated by the bureaucrats to render it inaccurate at best and misleading at worst. Once CPI was a proxy measurement of inflation, but today it is disconnected from the actual price increases experienced by consumers.
According to the Bureau of Labor, the index is supposed to be "a measure of the average change over time in the prices paid by urban consumers for a market basket of goods and services." If that sounds like government gobbledygook, it is. Simply put, the CPI is supposed to measure the cost of living.
Over the past 30 years, the BLS has altered the formula it uses to calculate the CPI at least 20 times. As part of the new methodology devised by the bureau, the cost of food and energy have been deemphasized in determining the cost of living metric.
What makes this diabolical is those two components are among the most volatile. As every consumer knows, spikes in food and energy prices can leave the family budget in tatters. Yet in its infinite wisdom, the BLS no longer includes the full impact of these items in the index.
To understand the issue, it helps to know how the bureau collects and analyzes the data. The government uses samples from urban areas to collect price data. About 15,000 families nationwide are selected to participate in a point-of-purchase survey to learn what goods and services are being bought.
Once the data is organized, the bureau picks more than 200 items and weights them according to how many and how often the products and services were purchased. Over time, the methodology has changed to put less emphasis on food and fuel prices used to calculate the cost of living.
What would motivate the BLS to make such a move? The answer can be found in the way the federal government uses the CPI. For example, Social Security payments are tied to inflation. So are benefits for retired military personnel, disabled veterans and federal government pensioners.
As the cost of living increases, these payments and benefits are supposed to be adjusted upward. But that's only in theory. The problem is that the current methodology engineered by government bureaucrats understates real inflation, negating the need to increase payments to vets and others.
Stagnant inflation helps reduce the impact on the federal budget. But in real terms it hurts seniors and military veterans because their payments have less purchasing power and their benefits do not keep up with the mounting cost of medical care.
The Federal Reserve Bank also uses inflation as a key ingredient in determining monetary policy. Its stated goal is to keep inflation at two percent or less over the long run. One reason the Fed has kept interest rates low is because inflation has remained tepid.
However, the Fed uses a more reliable inflation tool. Instead of the CPI, it looks to another gauge, the Personal Consumption Expenditures Price Index or PCE. The measurement uses business surveys, rather than less reliable consumer surveys. The formula also adjusts for changes in consumer behavior.
Interest rates effect every American. When interest rates are low, saving money is less attractive, borrowing is cheaper and consumer spending usually rises. Conversely, when interest rates spike, savers earn more on deposits and borrowing becomes expensive, which discourages spending.
There are also political reasons for the government to tinker with the CPI. Rising inflation numbers never reflect well on the administration in power. It most likely cost President Jimmy Carter a second term. When he left office in 1981, inflation stood at a whopping 10.3 percent.
With today's oil prices temporarily in free fall, conventional wisdom says inflation is low. However, spiraling food costs continue to take a larger chunk out of family budgets. Food prices in the United States climbed nearly seven percent last year. That's inflation under any definition.
Even as food prices zoomed during the last 12 months, the official inflation rate averaged 1.6 percent for 2014 as measured by the CPI. That underscores the disassociation between the government index and the cost of living experienced by most Americans.
To address the situation, Congress should demand that the bureaucrats in the BLS include the full impact of food and gasoline prices in calculating the cost of living. It is no longer acceptable to let unaccountable federal workers tamper with a critical measurement that impacts many Americans.
According to the Bureau of Labor, the index is supposed to be "a measure of the average change over time in the prices paid by urban consumers for a market basket of goods and services." If that sounds like government gobbledygook, it is. Simply put, the CPI is supposed to measure the cost of living.
Over the past 30 years, the BLS has altered the formula it uses to calculate the CPI at least 20 times. As part of the new methodology devised by the bureau, the cost of food and energy have been deemphasized in determining the cost of living metric.
What makes this diabolical is those two components are among the most volatile. As every consumer knows, spikes in food and energy prices can leave the family budget in tatters. Yet in its infinite wisdom, the BLS no longer includes the full impact of these items in the index.
To understand the issue, it helps to know how the bureau collects and analyzes the data. The government uses samples from urban areas to collect price data. About 15,000 families nationwide are selected to participate in a point-of-purchase survey to learn what goods and services are being bought.
Once the data is organized, the bureau picks more than 200 items and weights them according to how many and how often the products and services were purchased. Over time, the methodology has changed to put less emphasis on food and fuel prices used to calculate the cost of living.
What would motivate the BLS to make such a move? The answer can be found in the way the federal government uses the CPI. For example, Social Security payments are tied to inflation. So are benefits for retired military personnel, disabled veterans and federal government pensioners.
As the cost of living increases, these payments and benefits are supposed to be adjusted upward. But that's only in theory. The problem is that the current methodology engineered by government bureaucrats understates real inflation, negating the need to increase payments to vets and others.
Stagnant inflation helps reduce the impact on the federal budget. But in real terms it hurts seniors and military veterans because their payments have less purchasing power and their benefits do not keep up with the mounting cost of medical care.
The Federal Reserve Bank also uses inflation as a key ingredient in determining monetary policy. Its stated goal is to keep inflation at two percent or less over the long run. One reason the Fed has kept interest rates low is because inflation has remained tepid.
However, the Fed uses a more reliable inflation tool. Instead of the CPI, it looks to another gauge, the Personal Consumption Expenditures Price Index or PCE. The measurement uses business surveys, rather than less reliable consumer surveys. The formula also adjusts for changes in consumer behavior.
Interest rates effect every American. When interest rates are low, saving money is less attractive, borrowing is cheaper and consumer spending usually rises. Conversely, when interest rates spike, savers earn more on deposits and borrowing becomes expensive, which discourages spending.
There are also political reasons for the government to tinker with the CPI. Rising inflation numbers never reflect well on the administration in power. It most likely cost President Jimmy Carter a second term. When he left office in 1981, inflation stood at a whopping 10.3 percent.
With today's oil prices temporarily in free fall, conventional wisdom says inflation is low. However, spiraling food costs continue to take a larger chunk out of family budgets. Food prices in the United States climbed nearly seven percent last year. That's inflation under any definition.
Even as food prices zoomed during the last 12 months, the official inflation rate averaged 1.6 percent for 2014 as measured by the CPI. That underscores the disassociation between the government index and the cost of living experienced by most Americans.
To address the situation, Congress should demand that the bureaucrats in the BLS include the full impact of food and gasoline prices in calculating the cost of living. It is no longer acceptable to let unaccountable federal workers tamper with a critical measurement that impacts many Americans.
Tuesday, June 2, 2015
How To Get Amtrak Back On Track
Hours after a tragic rail crash in Philadelphia, tawdry Democrats bombarded the media with irresponsible claims that Republicans were to blame for the Amtrak accident. Democrats pointed fingers at the GOP for slicing funding for Amtrak in a House vote on the very day of the derailment.
"It is deeply troubling that my Republican colleagues defeated an amendment to fully fund Amtrak just hours after this tragic rail crash," huffed Democrat Rep. Nita Lowey of New York. She contended that the Congress was "starving Amtrak of funding."
Her remarks and those of her brethren represent a new low in demagoguery, even for Democrats. Amtrak's financials had nothing to do with an engineer's decision to rev up his locomotive to 106-miles per hour as the train approached a curve with a 50-mile per hour speed limit.
Far from "starving" Amtrak, the American tax payer has forked over $66 billion to subsidize the national passenger railroad service since it was launched in 1970. Despite increases in passenger revenues, Amtrak has continued to lose money in every single year of its existence.
In its most recent fiscal year, red ink flowed again as Amtrak posted a $227 million operating loss. Amtrak uses a clever accounting scheme to hide their real losses. If it were a public company, Amtrak's deficit would have topped $1.1 billion after depreciation and other non-cash items that it excludes.
After every financial report, Amtrak's executives chatter about its glowing prospects. While its losses have narrowed in recent years, the railroad still requires millions of dollars in taxpayer funding. At its inception, lawmakers envisioned the railroad would one day stand on its own without federal subsidies.
That will never happen as long as it continues to operate as a quasi-government agency, much like the U.S. Postal System. Amtrak is long overdue for an overhaul.
For one thing, the passenger rail system is too large to ever be profitable. Amtrak operates more than 300 trains each day over 21,300 miles of track with connections to 500 destinations in 46 states. However, with few exceptions, most of Amtrak's routes are money-losers.
An examination of Amtrak's latest fiscal results underscores the problem. Amtrak actually turned a $496.7 million operating profit from its routes in the Northeast Corridor, which stretches from Washington, D.C. to Boston. The profit eclipsed the previous year's net of $390.1 million.
However, Amtrak's long-distance routes outside the Northeast Corridor dug a deep financial hole for the railroad. Operating losses hit $507.5 million. Ridership on long-distance trains has barely inched up over the years, while the Northeast Corridor has enjoyed a 7.5 million bump in passengers.
As a first step, Amtrak executives need to lop off unprofitable routes, much like the airlines have done. In the past, there has been little political will to reduce services, particularly in rural areas. That must change if Amtrak is ever to become a self-sustaining operation that doesn't need a government handout.
Once that is achieved, Amtrak should re-price its remaining routes. The railroad's rates for service need to more closely mirror its costs. Instead, what Amtrak has done is to continue to raise ticket prices on its profitable routes to subsidize the money losers. As rates continue to increase, ridership will suffer.
Amtrak, like the U.S. Postal System, also has a lousy reputation for service. Just over three-fourths of its trains ran on schedule in 2014. Instead of improving each year, its on-time performance is slipping. By focusing on service, Amtrak could attract more passengers.
In terms of its costs, Amtrak has a long way to go. The railroad's labor costs are out of line with its revenues, accounting for 50 percent of its expenses. Overly generous benefits need to be pared and Amtrak must reduce its personnel to achieve cost savings that will allow it stop the hemorrhaging.
Even with these changes, Amtrak still faces financial hurdles. For example, massive infusions of cash are required to update the aging tracks that Amtrak owns. Without upgrades, Amtrak will never be able to offer high-speed rail service that could build ridership and revenues.
Instead of trying to turn the latest rail disaster into a political advantage, Democrats need to join hands with Republicans to produce a plan to privatize Amtrak and to open passenger rail service to increased competition. That's the only way to snip Amtrak's dependence on taxpayers.
Yeah, that likely won't happen either.
"It is deeply troubling that my Republican colleagues defeated an amendment to fully fund Amtrak just hours after this tragic rail crash," huffed Democrat Rep. Nita Lowey of New York. She contended that the Congress was "starving Amtrak of funding."
Her remarks and those of her brethren represent a new low in demagoguery, even for Democrats. Amtrak's financials had nothing to do with an engineer's decision to rev up his locomotive to 106-miles per hour as the train approached a curve with a 50-mile per hour speed limit.
Far from "starving" Amtrak, the American tax payer has forked over $66 billion to subsidize the national passenger railroad service since it was launched in 1970. Despite increases in passenger revenues, Amtrak has continued to lose money in every single year of its existence.
In its most recent fiscal year, red ink flowed again as Amtrak posted a $227 million operating loss. Amtrak uses a clever accounting scheme to hide their real losses. If it were a public company, Amtrak's deficit would have topped $1.1 billion after depreciation and other non-cash items that it excludes.
After every financial report, Amtrak's executives chatter about its glowing prospects. While its losses have narrowed in recent years, the railroad still requires millions of dollars in taxpayer funding. At its inception, lawmakers envisioned the railroad would one day stand on its own without federal subsidies.
That will never happen as long as it continues to operate as a quasi-government agency, much like the U.S. Postal System. Amtrak is long overdue for an overhaul.
For one thing, the passenger rail system is too large to ever be profitable. Amtrak operates more than 300 trains each day over 21,300 miles of track with connections to 500 destinations in 46 states. However, with few exceptions, most of Amtrak's routes are money-losers.
An examination of Amtrak's latest fiscal results underscores the problem. Amtrak actually turned a $496.7 million operating profit from its routes in the Northeast Corridor, which stretches from Washington, D.C. to Boston. The profit eclipsed the previous year's net of $390.1 million.
However, Amtrak's long-distance routes outside the Northeast Corridor dug a deep financial hole for the railroad. Operating losses hit $507.5 million. Ridership on long-distance trains has barely inched up over the years, while the Northeast Corridor has enjoyed a 7.5 million bump in passengers.
As a first step, Amtrak executives need to lop off unprofitable routes, much like the airlines have done. In the past, there has been little political will to reduce services, particularly in rural areas. That must change if Amtrak is ever to become a self-sustaining operation that doesn't need a government handout.
Once that is achieved, Amtrak should re-price its remaining routes. The railroad's rates for service need to more closely mirror its costs. Instead, what Amtrak has done is to continue to raise ticket prices on its profitable routes to subsidize the money losers. As rates continue to increase, ridership will suffer.
Amtrak, like the U.S. Postal System, also has a lousy reputation for service. Just over three-fourths of its trains ran on schedule in 2014. Instead of improving each year, its on-time performance is slipping. By focusing on service, Amtrak could attract more passengers.
In terms of its costs, Amtrak has a long way to go. The railroad's labor costs are out of line with its revenues, accounting for 50 percent of its expenses. Overly generous benefits need to be pared and Amtrak must reduce its personnel to achieve cost savings that will allow it stop the hemorrhaging.
Even with these changes, Amtrak still faces financial hurdles. For example, massive infusions of cash are required to update the aging tracks that Amtrak owns. Without upgrades, Amtrak will never be able to offer high-speed rail service that could build ridership and revenues.
Instead of trying to turn the latest rail disaster into a political advantage, Democrats need to join hands with Republicans to produce a plan to privatize Amtrak and to open passenger rail service to increased competition. That's the only way to snip Amtrak's dependence on taxpayers.
Yeah, that likely won't happen either.