Railroad Expansion, Most Effective Way to Rescue US Economy

April 3, 2009 - PRLog -- A well planed railroad expansion should be exactly the most effective "real economy" investment. Here is why.

Firstly, in the short term, a railroad expansion plan can create a large number of jobs and lift the consumer sentiment. China recently speeded up its railroad constructions to fight the global economic crisis, which has greatly contributed to the quick recovery. Obviously, a large scale railroad expansion will stimulate the growth of a wide range of key business sectors, including constructions, services, material supplies, steel manufacturing and information technology industry. Millions of jobs will be created as a result.

Secondly, in the middle term, a well constructed railroad system will stimulate the growth of tourism and travel industries. When the broad economy is in a bad shape, the travel industry suffers a great deal. Travelers in the United States have been heavily replying on high cost air transportations in the last decades. Needless to say, if we had a cost effective transportation alternative in place, the travel industry would be much more resistant to the economic crisis like the one we are in now.

Finally, in the long term, a good nationwide railroad network will provide an improved infrastructure for the expansion of manufacturing sectors. Granted, the high labor cost is one major cause for many manufacturers to move their plants oversea. However, an impact of high transportation costs can not be ignored. If is startling that the cost for shipping a seventeen-ton container from most parts in China to California is around $1300, while shipping an one-ton crate from Michigan to New York would cost as much as $2000. You many argue this is still due to labor costs. But shipping by rail, though inconveniently available only in limited destinations within the United States, are also much less expensive than shipping by the dominated transportation means - trucking. So I must argue railroad expansions will improve the competiveness of the US manufacturers.

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Amlink International is an international consulting firm, specializing China business consulting, China information services and China travel consulting.