From Brad Plumer at WaPo: Study: Privatizing government doesn’t actually save money.
The theory that the federal government should outsource its operations to private firms usually rests on a simple premise: It saves money. But why should we believe it saves money? Often the argument is made by pointing to salaries for public- and private-sector employees in comparable jobs and noting that the private-sector employees make less. So outsourcing the task to the private worker should be cheaper, right? That’s the theory, at least. But a new study from the Project on Government Oversight suggests that this theory is quite wrong. In many cases, privatizing government turns out to be far more costly.Golly gee. But this flies in the face of accepted knowledge and conventional wisdom! It is obvious that if we let private companies bid on contracts and then pay some poor bastard less to do the same thing that someone with a decent paying gov't job decent benefits used to do, that we'll all save boatloads of money, isn't it?
Well... no, not really. The issue with this brilliant scheme is that while the poor bastard is making less money than the gov't employee did, his boss/the owner of the private firm makes a veritable shitload of cash, making the total cost to the taxpayer in many cases far more than it was before privatization.
Calls for privatizing government services, at the local, state or federal levels are invariably just clever ways of enriching those who run private service contractors at the expense of the taxpayer. Privatized means for profit. We must not forget this.
