What’s the price for nostalgia?

Andrew Smith
6 min readDec 10, 2023

People love trains.

There is a romanticism about riding the rails while the scenery quietly rolls past at a leisurly pace, with the clacking of the wheels over the rails and the engine’s toot-tooting at every crossing providing a soundtrack.

They love trains as an idea. They bring back fond memories of a bygone era, when times were simpler.

But when it comes to being a viable mode of transporting passengers, trains are just that — relics of a bygone era.

Once again, the federal government is trying to prop up the Amtrak zombie, announcing $8.1 billion of taxpayer money to improve or build 10 routes, including the California train to nowhere that is billions over budget despite not laying a single mile of track since it was initially approved 15 years ago. In addition, the government has identified several more corridors, including two serving Central Indiana, for planned improvements.

On the surface, this sounds great — more transportation options.

But the reality is, throwing taxpayer money at intercity passenger rail is a typical response for government — propping up a failed system that has little to no future.

Riding the rails between cities opened up the country and was the primary mode of travel until the 1920s. But the invention of the Model T — which made automotive travel available to the masses — and improved roads meant rail travel peaked in 1920 and began a steady decline, from 47.3 million passenger miles to 23.3 million by 1940. World War II provided a stay of execution for passenger rail, but shortly thereafter, ridership again began a steady decline, from 45.9 million passenger-miles in 1947 to 25.9 milion a decade later.

The arrival of postwar prosperity meant many families were able to afford cars and homes in the suburbs — farther away from the downtown Union Stations — and multilane highways and later, the Interstate Highway System — meant a precipitous decline. Add to that the growth of air travel, which became more reliable, more frequent and cheaper, especially after the deregulation in the 1980s.

In the 1960s, intercity rail traffic declined from 17.1 million passenger-miles in 1960 to 6.2 million in 1970. A year later, intercity passenger rail was nationalized into Amtrak as a compromise from private railroads who wished to shed their money-hemhoragging passenger service and federal regulators who wanted to keep it. Even into the 1950s, the only thing keeping intercity passenger rail viable was federal mail carriage, which ended in 1967.

So, one major strike against intercity passenger rail is that passengers don’t really use it. Americans travel 4.47 trillion passenger miles via highway and 641.9 billion passenger miles via air, while just 6.5 million passenger miles are via intercity passenger rail, almost a rounding error.

Intercity passenger rail is largely obsolete as a mode of transportation, and has been made so because of the freedom provided by the automobile and good highways, and the convenience, speed and relatively low cost of air travel. Both air and automobile are less expensive per-passenger mile. Autos provide the convenience of door-to-door service, while airlines provide speed and frequency that rail service — even high-speed rail — cannot match in most of the country.

For example, Amtrak is looking at increasing frequency between Indianapolis and Chicago, a city-pair that currently has one trip every three days, which leaves at inconvenient times. There are currently nine nonstop flights between the two cities that take less than 75 minutes. The Amtrak service currently lasts three and a half hours, which is comparable to the trip up Interstate 65 between the two cities.

But not calculated in that is, unless your origin and destination are within walking distance of the two Union Stations, you’ll have to take another trip — a taxi or rideshare, transit, or rental car — to your destination, which will likely add an hour or more and some additional cost. While this is also true with airlines, the time saved by flying is made up with the additional time spent getting from airport to destination. But the additional time and expense will make rail, even high-speed rail, slower than driving a car that goes directly from one’s origin to one’s destination and also allows travelers to have convenient personal transportation when they arrive.

The one area where intercity passenger rail makes sense is the Washington-New York corridor, where the population density and the proximity of major cities to each other makes it work. Not surprisingly, it’s also Amtrak’s only profitable route. Elsewhere, the taxpayers have to subsidize Amtrak service, even on sold-out trains.

The other major issue with the Amtrak expansion is the effect on freight rail. Hauling freight is where and how U.S. railroads make money. However, part of the agreement to download service to Amtrak in 1971 meant passenger trains would have scheduling priority over freight. In many of the corridors being studied, including Chicago-Indianapolis-Cincinnati and Indianapolis-Louisville — no new track is being laid. That means the rails will be tied up for passenger trains — which are a money pit taxpayers have to subsidize — and thus not as available for freight, which is profitable and has made the U.S. rail system one of the best in the world, moving 1.6 billion tons of goods a year.

Every mile-long freight train takes hundreds of semi trucks off the road. It is the fastest and most efficient way to move goods over long distances. Tying up the rails for little-used passenger services that won’t provide much, if any, marginal benefit will cost freight railroads a lot of revenue, especially if they lose customers due to constricted schedules.

The argument is often “why does this work in Europe?” It’s because in Europe, politicians require nationalized railroads to prioritize passenger service over freight, thus largely reserving the rails for passenger trains. To try to prop up the passenger rail service, European countries also ban short-haul regional flights. Doing so is politically popular — voters, after all, like having rail service available even if they don’t use it, because they don’t realize the cost. One of the unintended costs is this prioritization dumps thousands of trucks unnecessarily on the roads, creating extra traffic congestion. Even with that level of prioritization, rails only carry 5.6% of passenger-miles in Europe, while nearly 80% travel by car.

The answer is to leave intercity travel to what the people have already shown they prefer — driving for shorter trips and flying for longer ones. For those who prefer not to drive, there are a number of competing private bus systems that can provide inexpensive trips at a similar speed to a train. But where passenger numbers have shown intercity passenger rail is viable, it should be turned back over to the private railroads. Allow CSX, Norfolk Southern, Union Pacific and BNSF to decide what level of passenger service is potentially profitable, and when and where that should be, not taxpayers. Like Brightline, a privately-run rail system in Florida, they own the track, own the trains and understand how best to schedule the freight and passenger rail services together. Where passenger rail won’t be profitable, it won’t exist. But where it can be — such as where Brightline is operating in Florida and in other dense regional corridors — let the private railroads operate the trains and maintain the infrastructure. They’ll be much more committed to customer service than a government-run system that exists solely to keep politicans happy.

There can be a future for passenger rail in the U.S., but it won’t be Joe Biden’s vision. It should be a few privately-run regional corridors where rails can compete favorably with airlines and automobiles. But it should also come with the realization that airlines and automobiles are either faster or more convenient, and those are the transportation modes of choice for consumers.

When we allow the market to work, the transportation dollars will be shifted to the most optimal modes of transportation. In some areas, that will be rail. In others, it will be air. In others, it will be by car. But the most important thing is to get government out of the way to allow the market process to happen.



Andrew Smith

Andrew Smith is an economics instructor at New Palestine (IN) High School and an adjunct instructor for Vincennes University