For many years, the GOP has called for smaller government while, at the same time, extolling the virtues of privatization. GOP politicians have pushed for private schools through tax incentives and vouchers. In many states, they have turned the operation of prisons over to private, for-profit corporations. And thanks to the GOP, many of the operations once provided by military personnel are now provided by private contractors, such as Halliburton and Blackwater.
More recently, the GOP has pushed for privatizing Medicare through a voucher system and privatizing Social Security through private financial institutions.
The argument is that private companies can always perform tasks better and cheaper than public institutions. But before you jump on the privatization bandwagon, maybe you should ignore the rhetoric and look at studies which compare the costs and quality of services provided by private institutions with those provided by government.
Let’s begin by comparing charter schools with public schools. A 2009 report entitled Multiple Choice Charter School Performance in 16 States by the Center for Research on Education Outcomes at Stanford University found that only 17 percent of charter schools performed better than public schools while 47 percent performed at roughly the same level and 37 performed worse than public schools! This is in spite of the fact that charter schools often get to select students and usually provide few of the extra-curricular activities that public schools do.
As for prisons, a 2012 study by the Tucson Citizen found that private prisons cost the State of Arizona $3.5 million per year more than public prisons even though private prisons do not take high security prisoners or those with chronic illnesses. Ironically, the one exception is Sheriff Joe Arpaio’s Tent City. Like the name suggests, Tent City is a series of canvas tents in the desert with no heat or air conditioning. The bathrooms are portable toilets. Prisoners are made to wear pink underwear. And prisoners are served two meals a day. One meal consists of milk, juice, porridge and a hard roll. The other consists of a green baloney sandwich. Yet, despite the primitive conditions, Tent City costs more per prisoner than any other jail or prison in Arizona. Worse, recidivism is 14 percent higher than the national average.
Sheriff Joe may be the self-proclaimed “nation’s toughest sheriff” and an extreme conservative, but he is a failure as a steward of taxpayers’ money.
Nevertheless, the biggest waste of money is the privatization of our military. During the early stages of the Afghan war and the Iraq war, the Department of Defense (DoD) awarded no-bid contracts to Halliburton for everything from food service to transport and supply. In addition, the DoD handed out lucrative contracts for security services to Blackwater. The expectation was that privatizing such services would cost the US substantially less and allow the DoD to focus on military operations. But, after examining the DoD’s own documents, the Project On Government Oversight (POGO) found that private contractor employees cost 2.94 times more than an average DoD employee performing the same job!
According to POGO, in 2010 the DoD spent $254 billion for contract employees compared to $108 billion for civilian personnel directly employed by the DoD and $150 billion for military personnel.
None of this should come as a surprise to anyone. After all, the primary difference between a service provided by government and a service provided by a corporation is profit. The corporation must deliver profits in order to pay dividends to shareholders. And the corporate CEOs tend to pay themselves salaries that are many times those of government leaders. In most cases, the only way private corporations can compete with government is to reduce the scope and quality of service.
Imagine what will happen if they ever get their hooks into Medicare and Social Security!