Originally Posted by Villages Kahuna

OK, here's one that's different from either cutting spending or raising taxes, the traditional ways of balancing a budget.

How about privatizing several government-provided services?

George Bush had that idea with regard to letting people invest on Wall Street rather than continue Social Security in the same form it had been for years. We all know how flat on it's face that idea fell.

What about privatizing some of the following government functions? The idea is that decisions regarding the level of service that would be provided as well as the funding of the cost of the service would become the responsibility of the private sector. I present this list, a very abbreviated list, not because the elimination of their cost from the federal budget would have meaningful impact, but rather just an idea on how the cost of certain functions could be eliminated from government funding. So, in no particular order of importance...

• Let go back to the Bush idea of privatizing Social Security. Instead of the government guaranteeing some sort of income for the lifetime of the recipients, the government would make a once a year contribution to a fund which would then be owned and managed by the beneficiary. The contribution would be calculated using a discount rate comparable to a reasonable investment rate of return, which should provide the beneficiary with income until his/her actuarial life expectancy. While this plan would shift all of the risk to the individual, it would also remove the obligation of the government to meet the increased costs that come from extended life expectancies and inflation. People might not like to assume such risks, but that is the true free market.

• How about privatizing Medicare and VA health insurance? There is a groundswell of resistance to government-run healthcare, so shifting health insurance totally to the private sector should be a political win-win. We could simply flip-flop the party paying the premium and the insurer. The government could provide each Medicare-eliglible person or veteran with a stipend in the amount of the Medicare/VA premium they currently pay. Then the individuals could go into the private insurance market and buy whatever kind of policy they could get for that amount. The government would have no further responsibility to pay healthcare bills and would be indifferent to the inflation of healthcare costs if their rate of inflation was grossly more than the CPI. The stipend wouldn't even have to be a cash payment to individuals--it could be provided in the form of a tax deduction or a tax credit. But to keep people from simply taking the stipend and not buying insurance with it, the rules requiring hospitals to provide emergency room care to people who have no insurance would be changed. If someone who is Medicare-eligible under my proposed plan attempts to get ER service but has failed to buy insurance, he/she would be turned away. That shifts the responsibility to the individual and removes the cost of the uninsured having to be borne by the rest of us. For Medicare eligible people--no insurance, no healthcare, a pure free market proposition.

• Privatize the air traffic control system. Why is the government in this business anyway? The beneficiaries are the airlines flying in U.S. airspace. Let a private company be formed to provide the service and let them negotiate with the airlines for the level of service they desire and what they might be willing to pay for it.

• Eliminate all government funding for university research. Too many colleges are too reliant on government funding to make their budgets work. Colleges may have to downsize and a few might have to close as the result of the withdrawal of such funding, but why should the federal government be keeping inefficient colleges open with public funds anyway?

• Eliminate the National Highway & Transportation Safety agency. Why do we need this oversight of car manufacturers? Based on the level of recalls, it doesn't seem to have worked very well anyway. And why do we have to have a "ready team" to go visit every crash that occurs involving airplanes or trains? It seems to me that the public would determine soon enough which airlines or railroads were unsafe and stop using them. Let the free market determine these safety issues. If the airlines or railroads or car companies want to continue this sort of oversight on themselves, let them form a company to provide it and pay for it themselves.

• Sell off the national parks to private investors. The investors could operate those parks which enjoy large visitation frequency for a profit. Public lands that are relatively vacant and unvisited could be developed, mined or explored for natural resources.

• Sell all government-owned buildings to private investors. The government could then rent space in the buildings rather than to continue to assume the risks and costs associated with building ownership.

• Eliminate all agricultural subsidies of any kind. The time has come for American farmers to either compete effectively in the world commodity markets or go out of business. Continuing to subsidize farmers is a politically-driven policy that does little more than disguise our non-competitiveness in the free markets.

• Privatize NASA completely. There have been some steps in this direction anyway, but what purpose is served by the public continuing to fund a space exploration program? If some value is created, the private sector and the free market will assure that it continues. If the free market sees no benefit, the space program will simply die a natural death.

• Eliminate any funding for an interstate highway system or local transportation of any kind. Why is the federal government funding the construction of local highways, bridgs, tunnels, light rail or subway systems? If they are needed, let local governments or the private sector finance them. If that means there aren't enough people to finance highways and bridges in areas of low population--the plains states, the Texas panhandle, the southwest desert, the mountain states--so be it. Why should the federal government be paying for those facilities anyway?

• Sell off Amtrak to private investors. Again, why should the federal government be providing funding of any sort to a railway system which has proven to be inefficient and non-competitive with other forms of transportation? If no private investor(s) are willing to buy Amtrak assets and its business, then the free market will have determined it's value.

• Privatize Fannie Mae and Freddie Mac. That has been partially done already. But the federal government stands behind both the companies and particularly the debt they issue to stay in business. Sell the businesses off to private investors and eliminate any government guarantees of their debt. Let the housing industry compete for capital just like any other business in the U.S. Why should every American be subsidized to buy a house by the federal government?

• Eliminate FDIC insurance of bank deposits. Too many banks survive solely because the public deposits their money with them only because they know the federal government will make good on their deposits even if the bank is badly managed. Why should the government take this risk? Let the public figure out which banks are well-managed and which are not. There may be some bank failures and some people will lose their savings, but in time the free market will identify the remaining reliable and well-managed banks where depositors can feel safe placing their savings without the guarantee of the federal government.

So, there you go. There's some ideas that could provide meaningful savings to federal government spending without either slashing spending or increasing taxes. While this is a long post, the list of other potential government services that could be privatized is a whole lot longer, I'm certain.

Anyone got any other ideas? What do you think?