Do Our Highways Generate Revenue?

Let me ask you this question: How much money did the United States Interstate Highway System make in 2010?

Undeniably, the United State Interstate Highway System is critical to commerce not only within the United States but really the world. Americans are consummate consumers and what we buy has to end up at Wal-mart, Target, or CostCo somehow. Americans also make products that must depart Kentucky for places around the world.

But, how much money does the IHS generate each year? Not the dollar amount of commerce flowing along the asphalt veins and tributaries. What does the Balance Sheet of the IHS look like?

Before I answer that question, let me ask another.

How profitable is the Airline Industry?

Is the airline industry profitable? What are your impressions of the industry? Maybe I should remind you of a few details. You may have heard of Braniff Airlines. Braniff declared bankruptcy in 1982. Pan-Am declared bankruptcy in 1991; TWA not much later in 2001. US Airways declared in 2002. Both Delta and Northwest Airlines declared bankruptcy in 2005. Frontier Airlines declared in 2008. American Airlines declared bankruptcy November 29th, 2011. Since 1978, almost 100 airlines have filed for bankruptcy protection in the United States (http://www.airlines.org/Pages/U.S.-Airline-Bankruptcies-and-Service-Cessations.aspx)

Who would argue that the airline industry is not a vital component to our national infrastructure? According to airlines.org, the commercial aviation industry "drives nearly 11 million jobs and $1.2 trillion in annual economic activity" (http://www.airlines.org/Documents/economicreports/2010.pdf).

And, my last question. Are the railways profitable? To help you answer that question, I refer you to the U.S. Surface Transportation Board. This Federal Agency is responsible for the oversight of our railroad network. One task is the accumulation of financial information for all national railroads. Here is an example http://www.stb.dot.gov/stb/industry/econ_reports.html. If you consult the example, you will note that railroads tend to have a profit, albeit a small one. However, the profits are volatile, that is to say they can change dramatically over a short time period.

Who would argue that the railroads are not a vital component to our national infrastructure? Shipping containers arrive at our ports. Shipping containers are moved to trucks and are mounted to railway cars. These shipping containers are then transported to Wal-mart, Target, BestBuy. Trains are extremely efficient, energy-wise, at moving goods from place to place.

The Interstate Highway System earns no money, to answer my initial question. Forget toll-roads; those do not count. The IHS earns zero dollars. The IHS is funded through taxes. Fuel taxes, shipping taxes, corporate and income taxes support our IHS.

The Airline Industry also is somewhat subsidized by tax-payer dollars. So, too, the Railroad Infrastructure.

EVERY vital conveyance in our country is either supported directly by tax-payer dollars, or subsidized with tax-payer dollars.

A National Commuter Railway Infrastructure should not have to pay for itself. No other essential means of transportation completely pays for itself.

The benefits of commercial airlines are self-evident. The benefits of our Interstate Highway System are self-evident. The benefits of our railroads are not as self-evident as we do not come into contact with railroads directly unless we have to wait for the passage of a train. Same for barge traffic. Unless a barge hits a bridge and the bridge is closed for evaluation we do not notice the importance of barge traffic.

A National High-Speed Railway would have multiple economic benefits. Linkages between cities would spur greater economic development. Literally millions of jobs would be drive by high-speed commuter lines. Employment would stem from construction of new rails and maintenance and modification of existing rail lines. Conductors and rail stewards would assist travelers during their journey. Snacks and beverages would be consumed. Wi-Fi and cellular access would allow travelers to stay in touch with family and work.

A Multiplier Effect would occur as facilities and industries arise to address the needs of the rail lines, from manufacturing replacement parts to rental car outlets for people needing local transportation.

The reduction in petroleum from automobile travel or airline travel could potentially reduce the demand for petroleum domestically. A reduced demand would have at least two effects. First, prices would decrease for fuel. Fuel costs are a huge factor in pricing. Lower fuel costs for airlines could potentially help their bottom-line, increasing profitability. Air travel could become less expensive. High-speed trains are also more energy efficient and environmentally-friendly. Fewer emissions means less environmental damage.

Local car rental agencies could shift towards vehicles with less emissions, like Prius, Volt, Leaf, or the SMART car. An increase in demand for electric vehicles could help improve the Economies of Scale needed to reduce production costs. Reducing production costs for these vehicles could bring them into a more affordable range, allowing more people to purchase them.

I envision a network of high-speed rails, the St. Louis-Chicago route, Chicago-Cleveland, the Cleveland-to-Philly Line, Philly-to-Boston. Westwards, St. Louis-KCMO-Denver; Denver-to-Salt Lake City-to-Las Vegas. Then, Las Vegas-Los Angeles.

A Japanese Bullet Train travels at speeds around 186mph. Imagine taking a bullet train from St. Louis to Chicago, a journey taking 1hr 40m. Or, all of those people driving between Kansas City, MO, and St. Louis, a drive I recently made (taking 4hrs), who could make that journey in 1hr 20min on a bullet train. And, that is the normal bullet train, not the really fast ones.

I hold out no hope for any of this. Not in this day and age. American politicians generally lack vision, or the political backbone, and are cowards toward Big Oil. Americans suckle at the derricks like babies at their mother’s bosom. We can’t pull ourselves away. The Germans use high-speed rails, the Japanese, the French. All highly developed, highly educated societies. High-speed rail jobs are also higher-paying jobs service jobs, or manufacturing jobs, or engineering jobs. But, politicians will not be convinced of any of this. Politicians want a badge like a Cub Scout that they can earn immediately and trumpet at dinners and fund-raising engagements.

Politicians do not look downstream, do not consider the future, not the real future. The future of our children, their children. The future a politician sees has a two-, four-, or six-year horizon. Hence our current financial debacle.

Push off responsibility to tomorrow; let those people clean it up.

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