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As Long as We Remember...

June 28, 2011

Privatization: Another View

Farrell Keough

Once Hennypenny realized “the sky was falling,” she immediately went forward to tell the King. Having met up with Cocky-locky, Ducky-daddles, Goosey-poosey, and Turkey-lurkey – they all decided to hurry together to inform the King of the dire circumstances. Problem was, as wise and helpful as these avian creatures were, Foxy-woxy had other plans!


A similar circumstance is taking place with the privatization plans for Frederick County. A small group of vocal community activists have already set about writing Letters to the Editor as well as posting on various social networking sites.


In general, their methodology follows two patterns: declare much of this current Board of County Commissioners disengaged toward those in need or claim that attempts at privatization have already failed in the past.


For instance, some will claim that handing back Head Start to the federal government was somehow harmful to children. Truth be told, Head Start has shown no evidence of helping under-privileged children over time: “In 1985 the Department of Health and Human Services undertook the first meta-analysis of Head Start research and shook the establishment with its dire findings: ‘In the long run, cognitive and socio-emotional test scores of former Head Start students do not remain superior to those of disadvantaged children who did not attend Head Start.’ In other words, Head Start was a false start – the net gain to children was zero.”


Therefore, what logical sense does it make to require taxpayers to continue paying additional support for a federal program which, by its own department’s measures, has failed? None, what-so-ever.


In fact, forcing county residents to pay an additional tax for a program which has a proven history of failure is far and away more damaging – not only by robbing the public of their incomes, but perpetuating a failed system based solely upon guilt.


The second method involves incidents in history where a private company valued profit over service and somehow the government intervened to save the day. While companies can default and go bankrupt, history shows us that government is much more the problem than the solution.


The real problem lies with both the growth of government and the increasingly exorbitant costs for pensions and other retirement benefits. As highlighted by Reason TV and shown on a Heritage Foundation website, the video Georgia City Saves Big After Privatizing Services presents how these ever increasing and unsustainable government costs can be mitigated.


So, the question becomes, has government ever tried managing these costs? In the middle 1980s, the federal pension system was ended. The Thrift Savings Plan system was instituted to replace the very generous pension system previously offered. Similar to a 401k, the Thrift Savings Plan is dependent on employee contributions with up to a 5% match. While that match can be more generous than many small businesses can afford, it is most assuredly much less than the previous pension system.


Hence, when we look into history, we find that our government did try to resolve these unsustainable costs. Yet, we have not seen a substantial savings in government costs over time – in fact, just the opposite. How can this be explained?


The answer is surprisingly simple – there is virtually no incentive in government to maximize costs. In fact, it is beneficial for government to increase the number of employees and the range and reach of their control. For instance, most government organizations continue to exist even after their purview has been accomplished.


Take NASA – this administration was formed for space exploration and moon-landing. As the final Shuttle Flight is targeted for early July, what is the continued purpose of this sizeable executive branch agency? Today, NASA has become one of the major global warming study services for the United States. No longer the point of contact for beating our Cold War enemies or providing new technologies for communications, this agency has morphed into an arm of promoting the false claims of man-made environmental harm.


While private enterprise is also interested in growth and promotion of services, the limiting factors are financing and the relationship to elected officials. The public can track contracts as well as see the savings from the efficiencies of the private market, the incentives for these services to grow unrestricted are assuaged.


In other words, as market controls find the least expensive mechanism to provide the services required, the incentives for our elected officials to save taxes or provide the most efficient services increases.


This equates to more money in all of our pockets and only those services deemed most important to provide – services which can be created or ended once the public demand either increases or diminishes. No longer must government entities continue to exist or morph into something new. This equates to government services which are both transparent and truly desired and provable as necessary to the public. Finally, a way to provide necessary government services without being tied to the old ways of the status quo.


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