Selling Our Public Interests

The extension of our unsustainable tax cuts were pushed through under the guise that lower taxation will create jobs.  These reduced tax revenues have let us with budgetary shortfalls in federal, state, and local governments.  The corresponding cuts are being imposed on the poor to make up for the budgetary gaps, such as denying heating assistance for the poor.  Our federal government, as well as some states, are considering privatizing current or previously held public services as a way to boost revenues.  But are these measures really good for America or for Americans?

Texas privatized their public water system in order to “control costs”.  Granted, by eliminating the public held water department has brought forth a one time boost to their state budget,.  However, the long term effects may not be beneficial for the residents of Texas in the long run.  In order to grant the Texas budget a short term boost, Texas failed to realize the long term revenue income in their water department.  Citizens of Texas found that their prices went up, not down.  In fact, the prices charged to customers for water went up nearly 45% and prices charged for sewer rose over 50%.  Quality and service declined, instead of improved.  They also found that pollution went up, as the EPA has less power over private industries than in the public sector.

Pennsylvania is considering selling off their state run liquor stores.  Again, not only will Pennsylvania be sacrificing a long term revenue to their budget, but the state will also sacrifice control over liquor sales.  The argument used is whether it is the role of the government to sell wine and spirits, but this is a disingenuous argument at best.  Although it is not the government’s role to sell these goods, it is the government’s role to control the sales of alcohol.  The best enforcement and control of the sale of liquor and wine is to leave these sales in the hands of the government.  Private industry will work to produce profits, not control the sale of these goods.  The state liquor stores work to control the sales of these products, not reaping profits off of their sales.

Traditionally police and fire departments have remained socialized in the public sector.  Currently, some states are considering making these services private in order to cut government costs.  We tend to forget, Ben Franklin warned about abuses of these departments if left in the hands of the private sector.  What he found in colonial Philadelphia was that fire and police protection centered around only those homes and businesses who helped to fund the corresponding departments.  Indeed, this is what we witnesses in rural Tennessee in October of 2010, when the homeowner neglected to pay the $75 “fire protection” fee and his house caught on fire.  Although the fire department arrived on the scene, the fire department refused to put out the fire which consumed his house and pet.  The fire fighters on scene did nothing to assist the non-payer’s fire, but rather to protect the neighboring homes of those who paid their fees.

Regrettably,  the conversation has been directed to reflect taxes as the sole income for governments.  This has not always been, nor is this necessarily the case, though this will become true if governments continue to sell off their assets and public holdings.  So we must ask ourselves, is this really in our best interests?  Will we, as Americans, prosper more with diversified revenues through public holdings as well as tax income, or will we prosper more under a tax-only income system?  Or more pertinent, will Americans be able to shoulder the burden alone through their taxes?