Posted by Sir Four at 10:10am Jan 4 '05Republicans tout the mantra of privatization. "Private industry can do things with greater efficiency," they say. Is that a true statement?
Consider Medicare. In the Medicare program, the percentage of funds that gets used to run the program hovers just above 2%. The rest of the money goes out to providing care for citizens in the program. Compare that to private health care plans, which have overhead costs somewhere between 12% and 25%. Why so high? Executive officer salaries and compensation packages. Dividends to stockholders. Corporate perks. Fancy office buildings. If the US contracts out health coverage to private companies, a larger percentage of the taxpayers' money is being diverted away from patient care. Do private efficiencies more than make up for that? Why not simply demand that state-run programs be made more efficient? Are they even inefficient, or is that just something Republicans claim? What's the motivation to privatize? To increase efficiency or reward campaign supporters?
Consider the blackout that a large portion of the country experienced in 2003. It was revealed that many of the high-voltage power lines were running at near maximum capacity. Back when the system was state-run, the rule was to not allow the lines to be run above 70% of maximum capacity, to allow for a safe buffer zone. When the system was put into private hands (no doubt under the logic that it would be run more efficiently) one of the ways that private industry saved money was to do away with the 70% rule and let the lines max out before adding more capacity. Hey, it was cheaper that way. In fact, it was cheaper to put off building up a lot of the electricity infrastructure, and now we are long overdue for upgrades. Cutting corners saves money.
Consider the flu vaccine. There is no such thing as a state-run facility to produce it. We rely on private industry. Private industry failed to deliver this year, so no flu vaccine. Hey, it just wasn't profitable. And when you privatize, if something isn't profitable you don't get it, even if it saves thousands of lives. But that's capitalism for you. Only the things that are profitable are justified.
To review my three points...
1. State-owned programs have demonstrably greater efficiency in terms of money being skimmed off the top, which makes sense as private companies have to pay top dollar to executives, dividends, and various other corporate perks and expenses.
2. Private industry will cut corners to increase profits and will not always heed conservative and more costly guidelines that are recommended for good reason. They act in their own best interest, not the public's.
3. State-owned facilities do not have a profit motive; they are set up to provide a service to the citizenry. With private industry, unprofitable products or services simply become unavailable, regardless of the public need.
So, what do the good people of 4thKingdom have to say?
Consider Medicare. In the Medicare program, the percentage of funds that gets used to run the program hovers just above 2%. The rest of the money goes out to providing care for citizens in the program. Compare that to private health care plans, which have overhead costs somewhere between 12% and 25%. Why so high? Executive officer salaries and compensation packages. Dividends to stockholders. Corporate perks. Fancy office buildings. If the US contracts out health coverage to private companies, a larger percentage of the taxpayers' money is being diverted away from patient care. Do private efficiencies more than make up for that? Why not simply demand that state-run programs be made more efficient? Are they even inefficient, or is that just something Republicans claim? What's the motivation to privatize? To increase efficiency or reward campaign supporters?
Consider the blackout that a large portion of the country experienced in 2003. It was revealed that many of the high-voltage power lines were running at near maximum capacity. Back when the system was state-run, the rule was to not allow the lines to be run above 70% of maximum capacity, to allow for a safe buffer zone. When the system was put into private hands (no doubt under the logic that it would be run more efficiently) one of the ways that private industry saved money was to do away with the 70% rule and let the lines max out before adding more capacity. Hey, it was cheaper that way. In fact, it was cheaper to put off building up a lot of the electricity infrastructure, and now we are long overdue for upgrades. Cutting corners saves money.
Consider the flu vaccine. There is no such thing as a state-run facility to produce it. We rely on private industry. Private industry failed to deliver this year, so no flu vaccine. Hey, it just wasn't profitable. And when you privatize, if something isn't profitable you don't get it, even if it saves thousands of lives. But that's capitalism for you. Only the things that are profitable are justified.
To review my three points...
1. State-owned programs have demonstrably greater efficiency in terms of money being skimmed off the top, which makes sense as private companies have to pay top dollar to executives, dividends, and various other corporate perks and expenses.
2. Private industry will cut corners to increase profits and will not always heed conservative and more costly guidelines that are recommended for good reason. They act in their own best interest, not the public's.
3. State-owned facilities do not have a profit motive; they are set up to provide a service to the citizenry. With private industry, unprofitable products or services simply become unavailable, regardless of the public need.
So, what do the good people of 4thKingdom have to say?