Derailed

By Varney and Co

Once a symbol of China’s booming economy, the country’s high-speed trains may be getting a little off track. In recent weeks, China’s Railways Ministry announced it will be lowering the train’s top speed, as well as reducing ticket prices in an attempt to attract riders. These changes come as a result of their Railway Ministry’s debt that has reached an estimated $291 billion.

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While China reevaluates their own system, questions are being raised about the prospect of America to build its own. Both the president and vice president have voiced support for such a project, which according to President Obama, will improve travel and commerce.

Others like USC Professor James Moore are not so sure. In an LA Times article, Moore argues that “railroads are a crucial component of the U.S. freight management and distribution system, but we do not need and cannot afford a high-speed rail system for passengers.” Today on Varney & Co., he reinforced this belief.

“The president indicated in his State of the Union address that he wanted to bring high-speed rails to 80% of Americans within 25 years,” said Moore. According to Moore, the president and Transportation Secretary Ray LaHood were prepared to commit $53 billion to this project – an amount that Moore says is “a drop in the bucket” for a project of that scale.

“It would be very expensive to do that and unnecessary,” said Moore.

How expensive is too expensive? Moore says it is hard to tell. He says it is difficult to know how much states are planning to spend when the high-speed rail authorities in states like California keep shifting their numbers.

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“They are very optimistic, but in California alone you can easily drop $80 billion into an effort if you wanted to connect Los Angeles to San Francisco.”

While Moore agreed that there was some prestige in having these systems, he emphasized that in addition to China, other nations such as France have their own versions of a high-speed rail system and are also losing money.