I have been doing some reading, and the grape vines seem to indicate that the government may be doing some very serious spending in 09 as a means of triggering economic growth. I have also heard that it is very likely that some of this spending is likely to be directed at transportation-related industries like railroads.
What do you think the most likely targets of this putative rail-related spending will be? What do you think the most likely targets of this putative rail-related spending should be?
I think CREATE–perhaps even an expanded version–has to be up there.
Also, although I doubt it is going to happen. Do you think there is any chance they could/would use government money to revive the Rock’s Memphis line, perhaps in a BNSF partnership. I know it is called the Choctaw, but I call it the Memphis line because I do not know how to spell it (as opposed to all my other spelling mistakes on my posts).
I thiink this has some attractive elements to it. I am told there are several portions of the line that are still in place. It would help revitalize a region of the country. And, when I hear conversations about what lines we should not have abandoned, this line usually makes the short list of people who seem to know what they are talking about. But, if the Government gives BNSF this leg up, UP will scream foul and either nix the deal or get its own spending grant.
Other interesting proposals/topics for discussion are: electrification (discussed in another very interesting thread), and the third line in the the PRB (one wonders if the current environmental mood in this country is going to nix all signficant rail-related coal spending).
Gabe
P.S. I like discussions about the propriety of government spending in the private market as much a
At the spending/taxing rate we are seeing for ‘bail out’ packages, I rather doubt we will see money spent on a dormant rail line, If a line has been dormant for 30 years, and would offer nothing to ease congestion on parallel operating rail lines - what would be the point?
Maybe we will see a full ‘finance’ package for Amtrak so they can repair the backlog of damaged passenger cars and aqquire additional ones for the ‘traffic surge’ they have enjoyed the past year.
I see Canadian Pacific has announced a 200 million cut in infastructure improvements for 2009, but the 300 million slated for the DM&E/IC&E lines just purchased were not cut. It is sort of hard to go to the Fed’s with you hand out, and still be making money! US railroads are not in financial trouble like the ‘Big 3’ auto makers(at least at this point).
The articles I have read indicate that the spending (rail related or otherwise) is not necessarily directed at troubled industries in need of a bail out. Also, the tax rate is not indicative of the lack of spending. I have read from several sources that the classic way for treating a recession is to cut taxes and raise government spending–thus, injecting more money into the market.
Gee, I thought you said you did not want to talk about this. When I took economics, a prevailing view was that recessions and depressions were a thing of the past, now that modern government has found a way to prevent them, which amounts to just printing money and spending it as fast as possible. It is called Keynesian Economics.
The prescription does not, however, include the provision of cutting taxes along with the increased government spending as you say. Cutting taxes and increasing spending are antithetical, and are held as opposing viewpoints on how to end a recession.
Big government tax and spenders, of course, love the Keynesian idea, however, it had not been tested as of the time I was hearing it, and the theory has since been discredited in the minds of many. One of the simplest criticisms of the government flooding the economy with money is that such money has no real value, and thus causes inflation.
But you are correct in that massive government spending is considered by many to be a classic way of ending
I was under the understanding the theory was used, at least in part by FDR in the 30’s. Work programs and projects put people to work creating needed infrastructure.
Many of those “structures” still exist today and in use, but perhaps the time is right to do the modern version of it.
While not quite as glamorous as building new infra-structure…the maintenance, repair, capacity enhancement and replacement of existing infra-structure. As we all have experienced if you don’t maintain something…the next thing you know you have nothing (ie. the I35 bridge in the Twin Cities).
Admittedly, most of the federally built infra-structure that exists is in the Interstate highway system but in the rail industry, projects such as CREATE are definately in need of funding to completion to benefit the entire shipping community. Other railroad capacity enhancement projects that are geared to attracting more intermodal traffic off the highways and onto rail are valid ‘highway capacity’ enhancement projects.
Promoters of building a bigger government empire are always looking for routes to that end. One of their favorites is contending that our entire infrastructure is worn out and needs to be repaired or replaced through massive public works projects. The 35W bridge collapse was a perfect plum for them to hold up as example of how we have neglected all infrastructures, and what will happen if we don’t follow their prescriptions. But the fact is that the 35W bridge collapsed due to a design flaw, and had nothing to do with a lack of maintenance.
I have been doing some reading, and the grape vines seem to indicate that the government may be doing some very serious spending in 09 as a means of triggering economic growth. I have also heard that it is very likely that some of this spending is likely to be directed at transportation-related industries like railroads.
What do you think the most likely targets of this putative rail-related spending will be? What do you think the most likely targets of this putative rail-related spending should be?
I think CREATE–perhaps even an expanded version–has to be up there.
Also, although I doubt it is going to happen. Do you think there is any chance they could/would use government money to revive the Rock’s Memphis line, perhaps in a BNSF partnership. I know it is called the Choctaw, but I call it the Memphis line because I do not know how to spell it (as opposed to all my other spelling mistakes on my posts).
I thiink this has some attractive elements to it. I am told there are several portions of the line that are still in place. It would help revitalize a region of the country. And, when I hear conversations about what lines we should not have abandoned, this line usually makes the short list of people who seem to know what they are talking about. But, if the Government gives BNSF this leg up, UP will scream foul and either nix the deal or get its own spending grant.
Other interesting proposals/topics for discussion are: electrification (discussed in another very interesting thread), and the third line in the the PRB (one wonders if the current environmental mood in this country is going to nix all signficant rail-related coal spending).
Gabe
P.S. I like discussions about the propriety of government spending in the private market as much as the next guy. And, it would be a very interesting topic, in light of the a
The Memphis-Tucumcari line is beyond rehab, both from a need and a condition perspective. Santa Fe looked at this 25-30 years ago and passed primarily because of money issues.
Since that time alternatives have been created through mergers and the enhancement of established lines. Also the ROW has been appropriated through various means.
There are probably 500 projects which would rank above this one.
Even if the worst fears of our conservative forum members come to pass and government money flood gates open, I think the probability of reactivating dormant lines is fairly remote. Going back to previous discussions on that idea, it has been suggested that expanding capacity on existing routes, i.e., adding sidings, double tracking, improving signaling, expanding yards, will get a bigger bang for the buck than building new routes.
Assuming there is a special appropriation of federal funds for transportation infrastructure, I would see the split of the funds something along this line: Highways are likely to get the biggest share. Let’s face it, private automobiles are still the primary method for passenger transport and trucks do handle a huge chunk of the freight business. I think rail transit for commuter service would be next on the list. Since they have plans made or in process, I thinks grants to shortline freight railroads and regional intercity passenger project are likely to get the next look. Because the relative dollar amounts are so modest, I could see Amtrak getting some additional money for equipment for long distance trains. That part could have money for some rebuilds, wreck repairs and perhaps new cars.
I think the Class 1 freight railroads are going to be at the bottom of the list. Beside the CREATE project, both CSX and NS have identified corridors where capacity improvements would have big public benefits, mainly by reducing highway truck traffic. NS has already gotten some government funds and I think CSX is working on the development of public/private projects. It appears to me that our western carriers are not as aggressive as CSX or NS on public/private projects. BNSF’s Matt Rose says he would like to see tax credits for investments in capacity expansion projects. UP recently turned down a California offer of $43 million to be used fo
