Literature suggests that the causes of the decline of passenger rail were complex. The industry was hobbled by government regulation and labor inflexibility, which undermined passenger rail just as the industry faced an explosion of competition from flexible and subsidized automobile and airplane transportation. These for-profit railroads were structured to sell access to elaborate, efficient roads at a profit; they lost in the competition for passengers to parallel, publicly-funded, non-profit turnpikes, air strips, and highways in the sky.

While passenger rail faced internal and governmental pressures, new challenges appeared that undermined the dominance of passenger rail: highways and commercial aviation. The passenger rail industry wilted as government backed these potent upstarts with billions of dollars in construction.

Beginning roughly in the WWI era, cars became more attainable to most Americans. This newfound freedom and individualization of transit became the norm for most Americans because of the increased convenience. Government actively began to respond with funds from its treasury and later with fuel tax funds to build a non-profit network of roads not subject to property taxation[14] that rivaled and then surpassed the for-profit network that the railroads had built in previous generations with corporate capital and government land grants. All told between 1921 and 1955 governmental entities, using taxpayer money and in response to taxpayer demand, financed more than $93 billion worth of pavement, construction, and maintenance.[10]

In the 1950s, a second and more formidable threat appeared: affordable commercial aviation. Government at many levels supported aviation. Governmental entities built sprawling urban and suburban airports, and funded construction of highways to provide access to the airports.