Downsizing the Federal Government
Privatization, by Chris Edwards, July 12, 2016
Introduction
Privatization, by Chris Edwards, July 12, 2016
Introduction
YOUR GUIDE TO
CUTTING FEDERAL SPENDING
The
American economy is sluggish, the government is running large deficits, and the
public is frustrated with the poor performance of federal bureaucracies. One
reform that can tackle all of these problems is privatizing federal businesses
and assets. This study discusses a dozen advantages of privatization and
describes government activities that should be moved to the private sector.
A
privatization revolution has swept the world since the 1980s. Following the
United Kingdom's lead, governments in more than 100 countries have transferred
thousands of state-owned businesses to the private sector. Railroads, airports,
energy companies, postal services, and other businesses valued at more than $3
trillion have been privatized. Governments of both the political right and left
have unloaded state-owned businesses.
Despite
the global success of privatization, reforms have largely bypassed our own
federal government. Indeed, many activities that have been transferred to the
private sector abroad remain in government hands in this country. That creates
an opportunity for U.S. policymakers to learn from foreign privatization and
enact proven reforms here.
This
study describes why the federal government should privatize the U.S. Postal
Service, Amtrak, the Tennessee Valley Authority, the air traffic control
system, lands, buildings, and other businesses and assets. Such reforms would
increase efficiency, spur innovation, create greater transparency, and improve
the environment.
Privatization
would allow entrepreneurs to take on challenges at which federal bureaucracies
are failing. The United States is a land of huge talent and diversity. But to
take full advantage of those assets, we should divest the government of
activities that individuals and businesses can perform better by themselves.
A
privatization revolution has swept the world since the 1980s. Governments in
more than 100 countries have moved thousands of state-owned businesses and
other assets to the private sector. Airports, airlines, railroads, energy
companies, postal services, and other businesses valued at about $3.3 trillion
have been privatized over the past three decades.
Privatization
has improved government finances by raising revenues and reducing spending.
More important, it has spurred economic growth and improved services because
privatized businesses have cut costs, increased quality, and pursued
innovation.
In
a 1969 essay, management expert Peter Drucker said that politicians in the
20th-century had been "hypnotized by government . . . in love with it and
saw no limits to its abilities."But he said that the love affair was coming to an end as
the mismanagement of state-owned businesses was becoming more apparent
everywhere. In his essay, Drucker called for a "re-privatization" of
government activities, but he was a bit ahead of his time.
Norb
Leahy, Dunwoody GA Tea Party Leader
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