Deregulation 101

Deregulation 101

I believe that the recent black outs in California are ample proof that deregulation is not only not always the best choice--but sometimes disastrous. The frenzy of deregulation that has swept both the nation and the globe in the last fifteen years is beginning to have serious long-lasting consequences for all of us. In 1980, Ronald Reagan was elected president and began a series of \"reforms\" that began to shift ownership of public assets to the private sector. This \"privatization\" was faithfully carried on by Bush, Clinton and now Bush again. It has also been moved forward by Congress, the Supreme Court and many a governor and state legislature, as well as governments around the globe. The argument put forward by proponents of \"privatization\" is that government is inefficient and wastes our tax money. So, we must give ownership of public assets such as utilities, health care institutions and prisons to private corporations who will not only run them more efficiently and save us tax money but also make a profit and benefit the economy at the same time. Sounds great, right?

The problem is there is a fatal flaw. It doesn\'t work. Why doesn\'t it work? For the most part it is based on incorrect assumptions. The first being that governments are not as efficient as corporations. This may sound good to a corporate promoter, but the facts don\'t bear it out. The data clearly shows that, almost without exception, the government can do it cheaper than a corporation. For example, in the field of health care our recent experiment with HMO\'s has shown us that private corporations spend almost four times as much of every dollar on corporate bureaucracy and profits as the Canadian government spends on its health care bureaucracy. There is one simple reason for this: governments aren\'t skimming a profit off the top.

Over the past couple decades we have heard much of the inefficiency of government bureaucracy and the huge cost over-runs associated with any government project. But what of the huge corporate bureaucracy and the huge cost overruns associated with any corporate project? In almost every instance the private sector has shown that it is less efficient than the government.

Our nation currently pours hundreds of billions of dollars of our tax money every year into corporate coffers over and above the value of any services or jobs they may provide for the people of our nation. In other words, we are being overcharged hundreds of billions every year. For the most part, this corporate welfare is given to rich corporations through the Pentagon system. Even in a time when there is no major security threat in the world, the United States military budget is rising. Also, the military budget is actuality much higher than one might think at first glance. For example, the Department of Energy is not normally counted as part of the military budget, yet most of its money is spent on nuclear weapons development and testing. In addition, if we take into account that all past cost overruns have been due to inflated military spending then we can see that the national debt and its interest payments are, in effect, payments on loans for the military-- and hence part of the military budget. Here is a chart showing the Federal budget from 1986.

*Gross federal revenue $794 billion
Less social security contributions 294
Actual federal revenue $500 billion
Defense 286
Foreign arms 12
Nuclear weapons (DOE) 8
Veterans