Hello everyone! I was going to move on from privatization of education but I ran into yet another good example at today's Board of Estimates meeting. I then want to speak a day or two about the debt ceiling budget deal much toted in the media now. I pointed to the tiered funding being put in place in Baltimore and Maryland using the Johns Hopkins' connected 'public' schools as an example. They of course aren't public, they are private and they are using a great amount of city and education funds that should go to city public schools. If you read about this school it will tell you the the millions it took to build this new deluxe school was not taken from the education budget. As is always true of anything Johns Hopkins says, this is not true. If money comes from the city or state it eats away at the ability of these government budgets to fund education. State and Baltimore City funds are indeed used to build and run this 'public' school.
NOW MIND YOU, JOHNS HOPKINS UNIVERSITY HAS A $2 BILLION PLUS ENDOWMENT AND HAS RECEIVED TRILLIONS OF TAXPAYER MONEY OVER DECADES. IT IS STARTING TO PATENT RESEARCH AND IS EXPANDING ITS REACH GLOBALLY...... AND IS FOR ALL INTENTS AND PURPOSES A PRIVATE CORPORATION. YET, THE CITY IS SQUEEZING FUNDS TO PAY BACK A REPAYMENT FOR A FINANCIAL BOND. IT IS ABSURD!!!!!! Johns Hopkins University is using the city general funds as an ATM and your incumbent is the banker handing the money to them.
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!
Baltimore finds funds for EBDI TIF Account is emptied to spare nonprofit from extra tax bill Posted: 6:00 pm Sun, September 18, 2011
By Melody Simmons and Joan Jacobson
Daily Record Business Writer
Baltimore finance officials have drained nearly half a million dollars from a special account to help cover the $1.4 million repayment due this month on $78 million in tax increment financing bonds issued for the struggling East Baltimore Development Inc. project. The transfer means the city will not have to levy a special tax at this ...
TODAY THE BOARD OF ESTIMATES APPROVED $3 MILLION IN FUNDS TO PAY FOR INFRASTRUCTURE UPGRADES IN THIS SCHOOL CONSTRUCTION AREA. NOW, BACK IN THE DAY WHEN BUSINESS WAS CONDUCTED WITH INTEGRITY, THE DEVELOPER WOULD HAVE PAID THOSE COSTS AND IT WOULD HAVE BEEN WRITTEN INTO THE CONSTRUCTION CONTRACT AGREEMENTS. WHO IS THE DEVELOPER IN THIS CASE? EBDI. MAKE NO MISTAKE, THIS IS NOT A PUBLIC PROJECT. IF YOU GO TO EAST BALTIMORE YOU WILL SEE A SPRAWLING HOPKINS CAMPUS THAT WILL NOT ALLOW YOU IN AS MOST OF IT IS PRIVATE.
AS GENTRIFICATION HAPPENS, THIS COMMUNITY SCHOOL WILL NOT BE OPEN TO THE PUBLIC. IT WILL BECOME THE GILMAN/ROLAND PARK DAY PRIVATE SCHOOL OF DOWNTOWN. IS THAT A PROBLEM.....NO. IS THE FACT THAT THE PUBLIC IS PAYING FOR IT AND IT IS USING FUNDS FOR UNDERSERVED COMMUNITIES TO DO IT? YES.
WHO ATTEND UNDERSERVED SCHOOLS......THEY ARE BLACK, THEY ARE WHITE, ASIAN, AND HISPANIC. There is plenty of wealth in Baltimore to pay for this and to use these funds on these affluent projects as the poor/working class neighborhoods and schools languish is WRONG.
THE VERY LAST ARTICLE IS A LONG RANT ABOUT PRIVATIZATION THAT I THINK ADDRESSES ALL THE ISSUES AS WELL AS AN OPEN LETTER WOULD. IT IS DESIGNED TO BE SENT TO YOUR ELECTED OFFICIALS. I HOPE YOU TAKE TIME TO PRINT AND SEND IT OFF!
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Everyone is listening to the budget reduction debates and it would appear that Obama is doing the right thing in holding out for the end of Bush Tax Cuts for the rich. He will take us over the 'cliff' to do it. We do need to end the Bush Tax Cuts to start moving towards reversal of wealth inequity so that in and of itself is good. I am also hearing the wink,wink, nod, nod that goes with it and that is why I am not happy. After all, we reelected all incumbents who were ready to sign off on the 'grand bargain' of the debt ceiling debate and make no mistake......they will continue to protect wealth and corporations next year when the grand tax reform occurs. So this fight for the middle class by making the rich pay may all be a ploy......LET'S HOPE OBAMA WILL DO THE RIGHT THING. HE MAY BE MAD ENOUGH AT ALL THE BANKERS AND CORPORATE EXECS FOR FUNDING MIT ROMNEY TO DO WHAT IS RIGHT!
What may well be the purpose of going over the cliff may be the across the board 10% cuts to all programs that will really kill the middle/lower class.
Maryland's Steny Hoyer has been shouting loudly and strongly that entitlements must be reformed. Remember, he is from a state that has billions in health fraud each year and they need that entitlement money to keep the fraud running. WITH THIRD WAY LEADERSHIP IN THE HOUSE AND SENATE, WE WILL KNOW DOUBT SEE LARGE CUTS IN SOCIAL PROGRAMS AND LARGE CUTS IN CORPORATE TAXES. MOST OF THE RICH HAVE THEIR WEALTH IN CORPORATE STOCKS NOW A DAYS, SO ENDING THE BUSH TAX CUTS WILL NOT IMPACT THEM VERY MUCH IF CORPORATE TAXES CONTINUE TO DISAPPEAR.
Remember the Bank Transaction Tax to make the banks pay for fraud and tanking the economy? Do you hear your incumbent shouting for that? Remember that corporations are rolling in profits made at the public's expense and it is they that need to pay this national debt down.....Is your incumbent saying that?
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!
IN EUROPE THE ENTIRE FRAUD AND DEBT IS BEING EXTRACTED FROM PUBLIC ASSETS AND PEOPLE'S WEALTH AND PENSIONS. IT IS INCREDIBLE HOW THEY ARE BEING CRIPPLED BY THESE AUSTERITY PROGRAMS THAT HAVE THE BANKS AND RICH KEEPING THE FRAUDULENT GAINS. THIS IS NOW GOING TO UNFOLD IN AMERICA AS THOSE THIRD WAY CORPORATE DEMOCRATS VOTE FOR DEBT SOLUTIONS THAT PROTECT THE RICH AND CORPORATIONS BY MAKING YOU AND I PAY WITH OUR QUALITY OF LIFE. Wait until next year when they do the traditional lowering of all tax rates and ending loopholes and subsidy routine. They do this every few decades as they pretend to make the rich pay. Each time these loopholes come back after only a few years and the social programs and funding is gone.
The good that can come from going over the cliff is the large defense cuts. These Third Way are hawkish and will bring these funds back, but maybe we will see reduction.
We simply need to run fiscal progressive candidates and vote Third Way incumbents out of office!
Economy
Corporations Calling To ‘Fix The Debt’ Want $134 Billion In Tax Breaks By Rebecca Leber on Nov 13, 2012 at 12:40 pm
Ahead of negotiations over the so-called “fiscal cliff” and what promises to be another fight over raising the debt ceiling, 63 CEOs representing the largest U.S. corporations, including several Wall Street firms, launched a campaign to supposedly “fix the debt.” However, this campaign calls for additional corporate tax cuts by switching the U.S. to what’s known as a “territorial” corporate tax system, along the lines of that proposed by Mitt Romney.
According to a report by Institute for Policy Studies, the corporations involved could gain up to $134 billion in windfalls if Congress approves such a system, which exempts foreign earnings from the U.S. corporate income tax:
– The 63 companies that are publicly held could gain up to $134 billion in windfalls. The biggest potential winner is General Electric, which would earn $35.7 billion on its overseas earnings of $102 billion.
A territorial tax system actually rewards businesses that offshore jobs and investments. Corporate tax rates are already at a 40-year low of just 12.1 percent. Revenue from corporate taxes has plunged, despite a 60-year high in corporate profits. THIS IS OUR STRUCTURAL BUDGET DEFICIT.
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THIS IS A REALLY GOOD LOOK AT WHAT THE THIRD WAY PARTY PLATFORM LOOKS TO BE ABLE TO ACCEPT. BOWLES IS THE CLINTON STAFFER THAT NEGOTIATED THE END OF GLASS-STEAGALL. THESE PEOPLE KILLED AMERICAN DEMOCRACY AND WE NEED TO MOVE THEM TO THE REPUBLICAN PARTY WHERE THEY BELONG.
THE BIG ISSUE FOR NEXT YEAR FOR CORPORATE TAXES IS THIS 'TERRITORIAL TAX' DESIGNATION. THEY WANT BECAUSE IT WILL REMOVE ALL TAXATION ON GLOBAL INCOME WHICH IS WHERE ALL THEIR BUSINESS IS NOW.
What "Grand Bargainers" Simpson and Bowles Really Stand For
Thursday, 29 November 2012 13:20 By Bernie Sanders, Campaign for America's Future | Op-Ed
Erskine Bowles. (Photo: New America Foundation / Flickr)
There has been a lot of discussion about Congress enacting a “grand bargain” during the lame duck session of Congress. Many members of Congress have talked about using the plan put forward by Alan Simpson and Erskine Bowles as an outline for a “balanced” approach to deficit reduction.
Let me take this opportunity to tell you a little about Alan Simpson and Erskine Bowles and what their plan would do.
As many of you know, Alan Simpson is a former conservative Republican Senator from Wyoming who has wanted to cut Social Security benefits for decades.
Here are just a few of the rude, inaccurate, and derogatory statements that Alan Simpson has made about Social Security:
However, you may not know that Erskine Bowles made the following statement in 2011 at the University of North Carolina: “Paul Ryan is honest, he is straightforward, he is sincere. And the budget that he came forward with is just like Paul Ryan. It is a sensible, straightforward, honest, serious budget and it cut the budget deficit just like we did, by $4 trillion.”
You may also be unaware that Erskine Bowles and Alan Simpson endorsed Congressman Charles Bass (R-NH) against progressive Democrat Ann McClane Kuster.
In their endorsement of Rep. Bass, Bowles and Simpson wrote: “Charlie supported a plan that demonstrated it is possible to raise revenues for deficit reduction through pro-growth tax reforms that reduce tax rates for individuals and businesses. Likewise, it is possible to reform entitlement programs … He is a brave leader who deserves the thanks of everyone who really cares about our nation’s future.”
Rep. Bass voted for the Paul Ryan budget that every Democrat in the Senate has voted against. In contrast, Kuster, who went on to defeat Rep. Bass, has said: “Let me be clear: I will never cut Social Security and Medicare benefits. My Tea Party opponent will.”
Even more distressing, in my opinion, is the belief that the Simpson-Bowles plan is a “balanced approach” to deficit reduction that we should be using as a model.
Here are the major elements of the Simpson-Bowles plan that I believe the Democratic Caucus should strongly oppose:
1. Cutting Social Security benefits for current retirees. The Simpson-Bowles plan would reduce Social Security benefits for current retirees by using a “chained-CPI” to determine cost-of-living-adjustments (COLAs). According to the Social Security Administration, enacting a chained CPI would cut Social Security benefits by $112 billion over 10 years meaning that the average Social Security recipient who retires at age 65 would get $560 less a year at age 75 and would get $1,000 less a year at age 85 than under current law.
Two-thirds of senior citizens rely on Social Security for more than half of their income, and the average Social Security benefit today is about $1,200 a month. At a time when seniors haven’t received a Social Security COLA in two out of the last three years as the price of prescription drugs and healthcare have gone up, the Simpson-Bowles plan would make it harder for today’s average senior citizen to make ends meet.
2. Cutting veterans’ benefits. Not only would enacting a chained-CPI be harmful to senior citizens, it would also make substantial cuts to the VA benefits of more than 3 million veterans. The largest cuts in benefits would impact young, permanently disabled veterans who were seriously wounded in combat. According to the Social Security Administration, permanently disabled veterans who started receiving VA disability benefits at age 30 would see their benefits cut by more than $1,300 a year at age 45; $1,800 a year at age 55; and $2,260 a year at age 65. That would be simply unacceptable.
3. Raising the retirement age to 69 years. Increasing the retirement age to 69 would reduce lifetime Social Security benefits for workers by about 13 percent. This would be particularly harmful to construction workers, nurses, factory workers and other labor intensive jobs. According to the Center for Economic Policy and Research, 45 percent of workers who are 58 years of age and older work in physically demanding jobs or jobs with difficult working conditions. Moreover, older Americans have a higher rate of long-term unemployment than any other age group.
4. Cutting Social Security benefits for middle class workers. According to the Social Security Administration, all of the Social Security policy changes in Bowles-Simpson would cut average annual Social Security benefits for middle-income workers (with average annual lifetime earnings of between $43,000 and $69,000) by up to 35 percent.
5. Reducing tax rates for the wealthy and large corporations. The Simpson-Bowles plan would significantly reduce income tax rates for the wealthiest Americans and largest corporations to between 23 and 29 percent — even lower than the top rate of 35% under the Bush tax cuts. Simpson and Bowles claim that some $1.2 trillion in revenue would be increased under their proposal by eliminating or reducing tax expenditures, such as the mortgage interest deduction, and the tax exclusion on employer health insurance and pension plans. However, a March 22, 2012 Congressional Research Service report has suggested that federal income tax rates could be reduced by no more than two percentage points under a realistic scenario of reducing tax expenditures in order to be deficit neutral, and could not reduce the deficit.
The President and almost all Democrats have supported repealing the Bush tax breaks for the top two percent. That means that the top individual income tax rate would be increased from 35 percent to 39.6 percent – the same level under President Clinton when over 22 million new jobs were created. We should eliminate corporate tax loopholes and tax breaks for the wealthy — and use this revenue to reduce the deficit and create jobs, not to lower tax rates.
Other harmful provisions in the Simpson-Bowles plan include:
For all of these reasons, I hope you will join me in opposing the Simpson-Bowles approach to deficit reduction.
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AS I SAID THIS IS A LONG MANIFESTO BUT I DOES A GOOD JOB ARTICULATING ALL OF THE POLICY THAT IS KILLING AMERICAN SOCIETY. REMEMBER.....
DEMOCRACY IS NOT A SPECTATOR SPORT.....YOU MUST MOBILIZE......ARE YOU EMAILING, SHOUTING ON THE PHONE, WRITING NEWSLETTERS, AND CREATING COMMUNITY BLOGS AND RUNNING FOR OFFICE?
When considering the topic of governmental privatization, one must conclude the old adage that it's actually socialism for the wealthy and capitalism for the poor. The sole beneficiaries of governmental privatization has been and will continue to be large corporations and the wealthy class in America. Historically, governmental privatization has always led directly to rampant government corruption, less service and lower quality products at a higher cost to taxpayers. Privatization may very well become America's next great man-made nightmare by ultimately establishing monopolies, influencing public officials, and seeking to obtain tax breaks and hidden subsidies that are commonly used to enrich private individuals, corporations and investors at the public's expense. It will also have the undesired effect of undermining states by removing their revenue base, thereby transforming this government revenue into profits for domestic and foreign private-sector enterprises. Privatization experienced it's first great failure in the United States in 1823 in New York City and has consistently failed since.
1849 - Mayor Caleb Woodhull stated: “The system of cleaning the streets by contract has signally failed of fulfilling public expectations, and I assume that it is no longer entitled to public favor. At first it seemed to promise important advantages, both as to economy and efficiency, but in its operation it has proved entirely inadequate to accomplish either of these desired results. . . . I would therefore recommend an abandonment, as soon as practicable, of the contract system, and the entrusting of the entire business to the Superintendent of Streets, under the supervision of the proper department.”
1892 - The Chicago Board of Health declared: “There are few, if any redeeming qualities attached [to the contract system]. No matter what guards are placed around it, the system remains vicious.”
1895 - ”Mayor Pingree of Detroit expressed the view: “Most of our troubles can be traced to the temptations which are offered to city officials when franchises are sought by wealthy corporations, or contracts are to be let for public works.”
1999 - Author Moshe Adler summarized: “By the end of the 19th century . . . The realization that every possible improvement to contracting out had been tried led city after city to declare its failure. . . Practically all American cities discarded contracting out at that time and switched to governmental production.”
Now, imagine for a moment the colossal damage that could be wrecked upon the United States In the 21st century in a fully privatized country, with our propensity towards lack of accountability, our seeming inability to adequately punish white collar crime, our high speed computers, off-shore tax havens and the armies of corporate accountants and tax lawyers all waiting in the wings for just such a dream opportunity. An existing example of the potential damage that may be caused would be the decades old strategy of privatization of the emerging nations in the southern hemisphere by the International Monetary Fund (IMF) and the World Bank. This strategy has been used like a large club over the heads of many of these third-world nations seeking to acquire loans, with devastating results of rampant poverty (Except for the public officials involved), public unrest and disenfranchisement of their nation's natural resources. Does the United States also wish to be part of this decades long failed experiment in privatization?
Governmental privatization is misguided because it is based on false theories about how people behave and about biophysical reality. The real world is much more complicated and corrupt than economists believe it to be. A good example of economist's simple mindedness is the remark by the 2005 Nobel economist, Thomas Shelling, who stated that climate change is not much of a threat to society. His reasoning for this assertion was that climate change will impact mainly agriculture and forestry, which represent only three percent of gross domestic product. In this case, one could reason that a world without forests, plants or more especially, without food to eat, would be a world that would not require a gross domestic product, or anything else for that matter.
In the real world, governmental privatization operates less like textbook competition and more like a textbook monopoly or oligopoly. It will ultimately lead to a less capable and responsive government at a much higher cost. This misguided concept has now become favored in the U.S. (again) for it's ideological purity, rather than it's practical content and realism. The empirical record indicates several counter intuitive outcomes from privatization. For example, the cost to the tax payer will tend to go up, not down. More political influence occurs, not less. The 'to big to fail' concept will ultimately take hold and large corporations will begin to function less like businesses and more like the protection rackets of the early twentieth century. Clear examples of this may be found with Wall Street and the Military Industrial Complex who offer nothing tangible, just threats of layoffs, potential for recession, warnings about our safety or the potential destruction of our economy if they are not given their way. Addition of other industry 'complexes' would simply expand and exacerbate this problem. Higher taxes on large corporations and lower taxes on small businesses (within productive and beneficial industries) would tend to discourage this type of phenomenon. This would give disincentive to large corporations from getting larger and incentive for smaller businesses to remain small, efficient and effective.
The Government Finance Officers Association (GFOA) estimates that hidden and indirect costs of privatization can add up to 25% more on the typical contract price. Additionally, according to a 2007 survey by the International City/County Management Association, 52% of governments that brought privatized services back in-house reported the primary reason was insufficient cost savings and over 60% sited reduced quality of service as the motivating factor to discontinue privatization. Additional costs were also required to dedicate sufficient personnel and time to monitoring contracts. If not, the local governments would run a high risk of poor contractor performance and the potential of wasting large sums of taxpayer money.
A modern example of rampant political influence, corruption and the gross overcharging of American taxpayers would be the Halliburton corporation. Halliburton’s first Iraq-war related contract was a no-bid, open-ended, 7-year contract awarded before the war even began. Halliburton’s revenue from Pentagon contracts jumped from $483 million in 2002 to over $6 billion in 2006. We should also remember the Enron corporation that hid debt from its books in order to artificially inflate its value to shareholders and Enron's illegal trading in electricity which led to the California energy crisis in 2001 and the subsequent continual rolling blackouts and higher electricity costs that followed. If you remember these brief examples of privatization, you should also realize that these examples are just a few of the potential pitfalls that may be expected with governmental privatization.
Here's the basic problem; When considering privatization, it should be remembered that corporations have one objective, which is to increase profits over time by any and all means available to them (this is required by law and the shareholders). The very notion that we may replace a supposed government bureaucratic entity with an equally bureaucratic, private-sector, for-profit business model and thereby receive better products and services at a lower cost to taxpayers is quite frankly, breathtakingly naive and incorrect. The history of governmental contracting tells a very different story. The actual paramount objective of governmental privatization is to generate ever increasing profit for the private sector, where profit is achieved primarily by shifting the product or service cost to labor through layoffs, steep wage cuts and a significant reduction or total elimination of employee benefits. This scheme tends to impoverish the middle-class and working poor, while greatly increasing the profits and income of the large corporations and the wealthy class.
As wages have continued to erode over the past 30 years, wealthy individuals, large corporations and investors have searched for a new and reliable income stream to offset the lost buying power of the middle-class. This has been accomplished by capital investment in foreign manufacturing facilities to capitalize on cheap labor and relaxed regulations in underdeveloped or emerging nations. Another strategy has been to encourage and promote over-extension of credit (borrowing), to compensate for diminished wages. This has allowed an upward flow of revenue to the wealthiest Americans of roughly $1.5 trillion annually, while borrowing by the middle-class to supplement lower wages has accounted for roughly $1.0 trillion in annual debt. This unrestrained borrowing over time has accelerated income inequality and has continued to become more pronounced years after year, since the early 1980's. These unrealistic economic models have now combined to become very destructive to our nation's economic health and is virtually destroying the middle-class in America.
A third scheme to be exploited has now become governmental privatization. The development of multiple 'cooperative complexes', of similar industries, based on the Military Industrial Complex model of strength through consolidation of industry sectors and cooperative unity. This has the potentiality of creating numerous monopolies, all vying for larger tax cuts, greater tax subsidies, less regulatory constraint and higher profits from local, state and federal tax dollars. This will also tend to accelerate takeovers of smaller and weaker companies by large corporations in the pursuit of total dominance of individual industry sectors and thereby straining the anti-trust laws to the breaking point. With human nature being what it is, it's terrifying to contemplate a government that is based solely on quarterly or annual profit margins. The government would be forced to concede it's capabilities and strengths to that of the private sector, or more accurately, to that of a new class of Robber Baron. The government would no longer have the power or ability to ensure the health, happiness and safety of it's citizens and elimination of government expertise and capabilities would have the effect of potentially jeopardizing national security by decreasing the governments ability to react quickly, efficiently and effectively to threats and national emergencies once governmental privatization is fully implemented.
To gain a greater understanding of the potential impact and insidious nature of privatization, let's look at the United States Postal Service (USPS). This is perhaps the most blatant attempt to forcibly privatize a nationally valued and beloved institution we have ever before witnessed in America. The problem originates with a 2006 Congressional mandate by Republican leadership that requires the USPS to 'prepay' into a fund that covers health care costs for future retired employees for the next 75 years and accomplish this herculean task in a mere 10 years. This begs the question; Why is Congress forcing the USPS to fund health care for people who haven't even been born yet? This ridiculous political maneuver may force USPS completely out of business, if the meddling and the injection of one poison pill after another by Congress does not stop. The result of dissolving the USPS will allow privatized firms to replace hundreds of thousands of Unionized postal workers with non-Unionized labor in the private sector, thereby continuing the downward pressure on wages to benefit private sector companies and continue the 30 year war on the middle-class with continued pressure to to lower wages and benefits of the average worker.
The average consumer should expect an immediate and substantial hike in their delivery costs If the private sector manages to seize total control from USPS. What could possibly be the logic and rationale to force the USPS out of business? Could it be the price of this service? No, USPS is far less expensive with overnight packages being roughly 40 plus percent cheaper and a standard letter being roughly 90% cheaper than private delivery companies. Could it be the tremendous cost to the federal government? No, USPS is structured like a business, in that revenues from the sale of postal products generally cover costs, and it receives virtually no federal appropriations. Could mismanagement be the cause? No, the USPS is very efficient and effective and provides service to all Americans, without exception and it accomplishes this even with the constant meddling by the U.S. Congress. One of the primary complaints listed by the opponents of USPS is that it's a monopoly. In this case, ask yourself; What are the private sector delivery services attempting to create? The answer is simple, a (cooperative) monopoly. The difference is, the private sector monopoly would be far more expensive, less effective and would not serve all Americans. Americans should also realize the United States Postal Service (with Congressional oversight) is addressed in the constitution, UPS, FEDEX and DHL are not.
The next potential Military Industrial Complex like industry will be the privatization of our nations jails and prison facilities. Prison privatization is now pushing forward with potentially devastating repercussions and has been on the rise for 25 years now. Prison populations have increased by 500% over the past thirty years. Most of this exponential growth has been directly associated with the utterly failed 'war on drugs', however, laws in support of increased profits for prison privatization will most likely become more numerous, less fair and prison sentences may become much longer to ensure increased profits, both for the owners of prisons and their potential use of prison labor for private sector firms at slave level wages.
Prison privatization is a particularly terrifying situation because this not only threatens the potential for corruption of government and the judiciary, but also threatens the personal liberty of the average American, all in the name of corporate profits. It's a terrifying thought to tie something as invaluable as personal liberty to that of a bottom-line profit for a large corporation. Owners of private prisons insist they will not engage in lobbying activities of the government or the judiciary and that this is prohibited by law. This may be true at this time because private prisons now represent a small share of control, compared to that of our government, however, one must imagine that as their share of control increases, so does the potential for corruption and political influence increase. If this does happen, who will stop them and is it really worth betting our fellow citizen's freedom on?
Governmental privatization in general is a threat to the security, stability and economic strength of the United States. Government should do Government's work. In cases where governmental privatization is appropriate or allowed, contracting should be tightly controlled and meticulously researched prior to engaging in any form of government contracting. The government may also wish to consider the following list of cautions, if governmental privatization is to be used in the future.
1). Government MUST NOT privatize institutions that threaten the safety, health or personal freedom of the average American. In addition, the privatization contract must demonstrate the savings to taxpayers and how service quality and cost reduction has been improved under the contract for the end consumer. Privatized companies should be required to release this report annually.
2). Government MUST make no-bid contracts illegal under all circumstances and there should be a solid plan in each contract to revert back to governmental production if necessary.
3). Government MUST not sell, lease or make available to private-sector businesses any publicly owned land, forests, national parks or publicly held resources owned by the government (The People). Current and future government leases permitted by law should be thoroughly reviewed to ensure maximum benefit to both the U.S. Government and the private-sector with the least impact on quality of life for present and future Americans.
4). Government should Increase punishments for white-collar crimes and strictly enforce them.
5). Government should enhance anti-trust laws and strictly enforce them. Lack of enforcement by the government has been the primary cause of failure of privatization in the past.
6). Government should charge an annual monitoring fee based on anticipated cost to the government. This fee should be added to all contract bids automatically and should allow for adjustments to monitoring costs, if necessary. Taxpayers should not be monetarily responsible for the cost of this necessary function.
7). Government should retain a minimum of 20% government control of all privatized industries by which to accurately judge cost, performance and quality standards against a known competitive base.
8). Government should establish a minimal living-wage and benefits package that all contracting companies must provide to employees who are engaged in government contracts.
9). Government should run it's affairs more like a profit-centered enterprise. This would entail insistence on high standards of performance from all contractors engaged in government work and consistently enforce these standards without compromise.
10). Government should monitor the weaknesses and inadequacies of privatized contracts and develop additional laws or regulations as necessary.
11). Government must ensure that all costs of maintenance, production and all potentially hidden costs that may redound, if not considered, to the federal government and should be added to the initial agreement/contract, down to who will pay for snow-removal if necessary.
12). Any and all government subsidies used for privatization should be meticulously reviewed for fairness and the potential benefit and return on investment for the average American.
America is now at a crossroad. Do we again place value and trust in our government or will we place trust in the private business sector to intelligently and fairly run our nation's most important functions? The general rhetoric since former President Ronald Reagan suggests that government cannot be trusted and the private business sector may be relied upon to solve all of our nations problems. This assertion is perhaps as absurd as the concept of governmental privatization itself, which seeks to place business in the position of total power and economic strength. The historical record indicates that private industry is ill equipped to efficiently and effectively perform vital functions of government without engaging in political corruption, crony capitalism and the degradation of the standard of living for working Americans. The actual intent of privatization in the long run is to shrink the size of government in a very unhealthy way and then, in the now infamous words of conservative lobbyist Grover Norquist, “I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
In closing, the government has been the only consistent driving force in our nation from the beginning and should be defended for it's tremendous accomplishments and overall value to the average American. The U.S. Government has kept this country prosperous and safe for 224 years now. It has fought and won numerous wars when our country was threatened by outside forces. It has been instrumental or responsible for the development of many of the patents issued that have dramatically improved the lives of not just Americans, but people all over the world. It has kept Americans safe through the implementation of Police, Fire and emergency personnel. It developed the internet that businesses tremendously profits from. It built, first the railroads and telegraph and then our modern system of roads, super highways, bridges, telecommunications and all the other infrastructure that makes modern life more comfortable, profitable and stable.
The U.S. Government has brought about an environment of equality for all of it's citizens and the opportunity to grow and prosper in a country that places the citizen's rights above that of the government. It has placed a man on the moon, fostered educational and research grants and publicly funded Universities, which have conquered diseases, extended life and increased prosperity through modern medical, technical and scientific advancements that have allowed private industry to thrive and handsomely profit from a collective will of our people that we should affectionately call our government.
As one of our nation's Founders, the second president of the United States, John Adams eloquently stated:
"Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men; therefore, the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity, and happiness require it."
To:
The President of the United States
The U.S. Senate
The U.S. House of Representatives
President of the United States (President Obama)
Please Stop Privatization to Eliminate Crony Capitalism and Higher Taxes.
Sincerely,
[Your name]
NOW MIND YOU, JOHNS HOPKINS UNIVERSITY HAS A $2 BILLION PLUS ENDOWMENT AND HAS RECEIVED TRILLIONS OF TAXPAYER MONEY OVER DECADES. IT IS STARTING TO PATENT RESEARCH AND IS EXPANDING ITS REACH GLOBALLY...... AND IS FOR ALL INTENTS AND PURPOSES A PRIVATE CORPORATION. YET, THE CITY IS SQUEEZING FUNDS TO PAY BACK A REPAYMENT FOR A FINANCIAL BOND. IT IS ABSURD!!!!!! Johns Hopkins University is using the city general funds as an ATM and your incumbent is the banker handing the money to them.
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!
Baltimore finds funds for EBDI TIF Account is emptied to spare nonprofit from extra tax bill Posted: 6:00 pm Sun, September 18, 2011
By Melody Simmons and Joan Jacobson
Daily Record Business Writer
Baltimore finance officials have drained nearly half a million dollars from a special account to help cover the $1.4 million repayment due this month on $78 million in tax increment financing bonds issued for the struggling East Baltimore Development Inc. project. The transfer means the city will not have to levy a special tax at this ...
TODAY THE BOARD OF ESTIMATES APPROVED $3 MILLION IN FUNDS TO PAY FOR INFRASTRUCTURE UPGRADES IN THIS SCHOOL CONSTRUCTION AREA. NOW, BACK IN THE DAY WHEN BUSINESS WAS CONDUCTED WITH INTEGRITY, THE DEVELOPER WOULD HAVE PAID THOSE COSTS AND IT WOULD HAVE BEEN WRITTEN INTO THE CONSTRUCTION CONTRACT AGREEMENTS. WHO IS THE DEVELOPER IN THIS CASE? EBDI. MAKE NO MISTAKE, THIS IS NOT A PUBLIC PROJECT. IF YOU GO TO EAST BALTIMORE YOU WILL SEE A SPRAWLING HOPKINS CAMPUS THAT WILL NOT ALLOW YOU IN AS MOST OF IT IS PRIVATE.
AS GENTRIFICATION HAPPENS, THIS COMMUNITY SCHOOL WILL NOT BE OPEN TO THE PUBLIC. IT WILL BECOME THE GILMAN/ROLAND PARK DAY PRIVATE SCHOOL OF DOWNTOWN. IS THAT A PROBLEM.....NO. IS THE FACT THAT THE PUBLIC IS PAYING FOR IT AND IT IS USING FUNDS FOR UNDERSERVED COMMUNITIES TO DO IT? YES.
WHO ATTEND UNDERSERVED SCHOOLS......THEY ARE BLACK, THEY ARE WHITE, ASIAN, AND HISPANIC. There is plenty of wealth in Baltimore to pay for this and to use these funds on these affluent projects as the poor/working class neighborhoods and schools languish is WRONG.
THE VERY LAST ARTICLE IS A LONG RANT ABOUT PRIVATIZATION THAT I THINK ADDRESSES ALL THE ISSUES AS WELL AS AN OPEN LETTER WOULD. IT IS DESIGNED TO BE SENT TO YOUR ELECTED OFFICIALS. I HOPE YOU TAKE TIME TO PRINT AND SEND IT OFF!
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Everyone is listening to the budget reduction debates and it would appear that Obama is doing the right thing in holding out for the end of Bush Tax Cuts for the rich. He will take us over the 'cliff' to do it. We do need to end the Bush Tax Cuts to start moving towards reversal of wealth inequity so that in and of itself is good. I am also hearing the wink,wink, nod, nod that goes with it and that is why I am not happy. After all, we reelected all incumbents who were ready to sign off on the 'grand bargain' of the debt ceiling debate and make no mistake......they will continue to protect wealth and corporations next year when the grand tax reform occurs. So this fight for the middle class by making the rich pay may all be a ploy......LET'S HOPE OBAMA WILL DO THE RIGHT THING. HE MAY BE MAD ENOUGH AT ALL THE BANKERS AND CORPORATE EXECS FOR FUNDING MIT ROMNEY TO DO WHAT IS RIGHT!
What may well be the purpose of going over the cliff may be the across the board 10% cuts to all programs that will really kill the middle/lower class.
Maryland's Steny Hoyer has been shouting loudly and strongly that entitlements must be reformed. Remember, he is from a state that has billions in health fraud each year and they need that entitlement money to keep the fraud running. WITH THIRD WAY LEADERSHIP IN THE HOUSE AND SENATE, WE WILL KNOW DOUBT SEE LARGE CUTS IN SOCIAL PROGRAMS AND LARGE CUTS IN CORPORATE TAXES. MOST OF THE RICH HAVE THEIR WEALTH IN CORPORATE STOCKS NOW A DAYS, SO ENDING THE BUSH TAX CUTS WILL NOT IMPACT THEM VERY MUCH IF CORPORATE TAXES CONTINUE TO DISAPPEAR.
Remember the Bank Transaction Tax to make the banks pay for fraud and tanking the economy? Do you hear your incumbent shouting for that? Remember that corporations are rolling in profits made at the public's expense and it is they that need to pay this national debt down.....Is your incumbent saying that?
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!
IN EUROPE THE ENTIRE FRAUD AND DEBT IS BEING EXTRACTED FROM PUBLIC ASSETS AND PEOPLE'S WEALTH AND PENSIONS. IT IS INCREDIBLE HOW THEY ARE BEING CRIPPLED BY THESE AUSTERITY PROGRAMS THAT HAVE THE BANKS AND RICH KEEPING THE FRAUDULENT GAINS. THIS IS NOW GOING TO UNFOLD IN AMERICA AS THOSE THIRD WAY CORPORATE DEMOCRATS VOTE FOR DEBT SOLUTIONS THAT PROTECT THE RICH AND CORPORATIONS BY MAKING YOU AND I PAY WITH OUR QUALITY OF LIFE. Wait until next year when they do the traditional lowering of all tax rates and ending loopholes and subsidy routine. They do this every few decades as they pretend to make the rich pay. Each time these loopholes come back after only a few years and the social programs and funding is gone.
The good that can come from going over the cliff is the large defense cuts. These Third Way are hawkish and will bring these funds back, but maybe we will see reduction.
We simply need to run fiscal progressive candidates and vote Third Way incumbents out of office!
Economy
Corporations Calling To ‘Fix The Debt’ Want $134 Billion In Tax Breaks By Rebecca Leber on Nov 13, 2012 at 12:40 pm
Ahead of negotiations over the so-called “fiscal cliff” and what promises to be another fight over raising the debt ceiling, 63 CEOs representing the largest U.S. corporations, including several Wall Street firms, launched a campaign to supposedly “fix the debt.” However, this campaign calls for additional corporate tax cuts by switching the U.S. to what’s known as a “territorial” corporate tax system, along the lines of that proposed by Mitt Romney.
According to a report by Institute for Policy Studies, the corporations involved could gain up to $134 billion in windfalls if Congress approves such a system, which exempts foreign earnings from the U.S. corporate income tax:
– The 63 companies that are publicly held could gain up to $134 billion in windfalls. The biggest potential winner is General Electric, which would earn $35.7 billion on its overseas earnings of $102 billion.
A territorial tax system actually rewards businesses that offshore jobs and investments. Corporate tax rates are already at a 40-year low of just 12.1 percent. Revenue from corporate taxes has plunged, despite a 60-year high in corporate profits. THIS IS OUR STRUCTURAL BUDGET DEFICIT.
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THIS IS A REALLY GOOD LOOK AT WHAT THE THIRD WAY PARTY PLATFORM LOOKS TO BE ABLE TO ACCEPT. BOWLES IS THE CLINTON STAFFER THAT NEGOTIATED THE END OF GLASS-STEAGALL. THESE PEOPLE KILLED AMERICAN DEMOCRACY AND WE NEED TO MOVE THEM TO THE REPUBLICAN PARTY WHERE THEY BELONG.
THE BIG ISSUE FOR NEXT YEAR FOR CORPORATE TAXES IS THIS 'TERRITORIAL TAX' DESIGNATION. THEY WANT BECAUSE IT WILL REMOVE ALL TAXATION ON GLOBAL INCOME WHICH IS WHERE ALL THEIR BUSINESS IS NOW.
What "Grand Bargainers" Simpson and Bowles Really Stand For
Thursday, 29 November 2012 13:20 By Bernie Sanders, Campaign for America's Future | Op-Ed
Erskine Bowles. (Photo: New America Foundation / Flickr)
There has been a lot of discussion about Congress enacting a “grand bargain” during the lame duck session of Congress. Many members of Congress have talked about using the plan put forward by Alan Simpson and Erskine Bowles as an outline for a “balanced” approach to deficit reduction.
Let me take this opportunity to tell you a little about Alan Simpson and Erskine Bowles and what their plan would do.
As many of you know, Alan Simpson is a former conservative Republican Senator from Wyoming who has wanted to cut Social Security benefits for decades.
Here are just a few of the rude, inaccurate, and derogatory statements that Alan Simpson has made about Social Security:
- On August 24, 2010, Alan Simpson wrote in an e-mail to the head of the Older Women’s League: “And yes, I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree. You know ‘em too. It’s the same with any system in America. We’ve reached a point now where it’s like a milk cow with 310 million tits! Call when you get honest work!”
- On Friday, May 6, 2011, Alan Simpson told the Investment Company Institute, that Social Security is a “Ponzi scheme”, “not a retirement program.” Simpson went on to say that Social Security “was never intended as a retirement program. It was set up in ‘37 and ‘38 to take care of people who were in distress — ditch diggers, wage earners — it was to give them 43 percent of the replacement rate of their wages. The [life expectancy] was 63. That’s why they set retirement age at 65.”
- On June 19, 2010, Alan Simpson said: “Social Security was never a retirement. It was set up to take care of poor guys in the depression who lost their butts who were getting butchered.”
However, you may not know that Erskine Bowles made the following statement in 2011 at the University of North Carolina: “Paul Ryan is honest, he is straightforward, he is sincere. And the budget that he came forward with is just like Paul Ryan. It is a sensible, straightforward, honest, serious budget and it cut the budget deficit just like we did, by $4 trillion.”
You may also be unaware that Erskine Bowles and Alan Simpson endorsed Congressman Charles Bass (R-NH) against progressive Democrat Ann McClane Kuster.
In their endorsement of Rep. Bass, Bowles and Simpson wrote: “Charlie supported a plan that demonstrated it is possible to raise revenues for deficit reduction through pro-growth tax reforms that reduce tax rates for individuals and businesses. Likewise, it is possible to reform entitlement programs … He is a brave leader who deserves the thanks of everyone who really cares about our nation’s future.”
Rep. Bass voted for the Paul Ryan budget that every Democrat in the Senate has voted against. In contrast, Kuster, who went on to defeat Rep. Bass, has said: “Let me be clear: I will never cut Social Security and Medicare benefits. My Tea Party opponent will.”
Even more distressing, in my opinion, is the belief that the Simpson-Bowles plan is a “balanced approach” to deficit reduction that we should be using as a model.
Here are the major elements of the Simpson-Bowles plan that I believe the Democratic Caucus should strongly oppose:
1. Cutting Social Security benefits for current retirees. The Simpson-Bowles plan would reduce Social Security benefits for current retirees by using a “chained-CPI” to determine cost-of-living-adjustments (COLAs). According to the Social Security Administration, enacting a chained CPI would cut Social Security benefits by $112 billion over 10 years meaning that the average Social Security recipient who retires at age 65 would get $560 less a year at age 75 and would get $1,000 less a year at age 85 than under current law.
Two-thirds of senior citizens rely on Social Security for more than half of their income, and the average Social Security benefit today is about $1,200 a month. At a time when seniors haven’t received a Social Security COLA in two out of the last three years as the price of prescription drugs and healthcare have gone up, the Simpson-Bowles plan would make it harder for today’s average senior citizen to make ends meet.
2. Cutting veterans’ benefits. Not only would enacting a chained-CPI be harmful to senior citizens, it would also make substantial cuts to the VA benefits of more than 3 million veterans. The largest cuts in benefits would impact young, permanently disabled veterans who were seriously wounded in combat. According to the Social Security Administration, permanently disabled veterans who started receiving VA disability benefits at age 30 would see their benefits cut by more than $1,300 a year at age 45; $1,800 a year at age 55; and $2,260 a year at age 65. That would be simply unacceptable.
3. Raising the retirement age to 69 years. Increasing the retirement age to 69 would reduce lifetime Social Security benefits for workers by about 13 percent. This would be particularly harmful to construction workers, nurses, factory workers and other labor intensive jobs. According to the Center for Economic Policy and Research, 45 percent of workers who are 58 years of age and older work in physically demanding jobs or jobs with difficult working conditions. Moreover, older Americans have a higher rate of long-term unemployment than any other age group.
4. Cutting Social Security benefits for middle class workers. According to the Social Security Administration, all of the Social Security policy changes in Bowles-Simpson would cut average annual Social Security benefits for middle-income workers (with average annual lifetime earnings of between $43,000 and $69,000) by up to 35 percent.
5. Reducing tax rates for the wealthy and large corporations. The Simpson-Bowles plan would significantly reduce income tax rates for the wealthiest Americans and largest corporations to between 23 and 29 percent — even lower than the top rate of 35% under the Bush tax cuts. Simpson and Bowles claim that some $1.2 trillion in revenue would be increased under their proposal by eliminating or reducing tax expenditures, such as the mortgage interest deduction, and the tax exclusion on employer health insurance and pension plans. However, a March 22, 2012 Congressional Research Service report has suggested that federal income tax rates could be reduced by no more than two percentage points under a realistic scenario of reducing tax expenditures in order to be deficit neutral, and could not reduce the deficit.
The President and almost all Democrats have supported repealing the Bush tax breaks for the top two percent. That means that the top individual income tax rate would be increased from 35 percent to 39.6 percent – the same level under President Clinton when over 22 million new jobs were created. We should eliminate corporate tax loopholes and tax breaks for the wealthy — and use this revenue to reduce the deficit and create jobs, not to lower tax rates.
Other harmful provisions in the Simpson-Bowles plan include:
- Increasing the regressive gas tax by 15 cents starting next year;
- Increasing premiums for Medicare, Medicaid, and the Children’s Health Insurance Program;
- Increasing interest rates on student loans;
- Increasing co-payments for middle class veterans receiving health care through the VA;
- Cutting 450,000 jobs in the federal workforce and private companies under contract with the federal government;
- Eliminating or limiting the exclusion of taxation on employer provided health insurance and pensions;
- Encouraging companies to ship jobs to China and other low wage countries by adopting a “territorial” tax system allowing corporations to evade U.S. income taxes by establishing subsidiaries overseas;
- Increasing taxes on low-income workers making between $10,000 to $20,000 a year by 14.5% in 2021 by moving to a chained-CPI; and
- Reducing the number of Americans eligible for Medicaid, SSI, the Children’s Health Insurance Program, WIC, Head Start, LIHEAP, the Earned Income Tax Credit, the Refundable Child Credit, and the Savers’ credit by shifting to a chained-CPI.
For all of these reasons, I hope you will join me in opposing the Simpson-Bowles approach to deficit reduction.
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AS I SAID THIS IS A LONG MANIFESTO BUT I DOES A GOOD JOB ARTICULATING ALL OF THE POLICY THAT IS KILLING AMERICAN SOCIETY. REMEMBER.....
DEMOCRACY IS NOT A SPECTATOR SPORT.....YOU MUST MOBILIZE......ARE YOU EMAILING, SHOUTING ON THE PHONE, WRITING NEWSLETTERS, AND CREATING COMMUNITY BLOGS AND RUNNING FOR OFFICE?
When considering the topic of governmental privatization, one must conclude the old adage that it's actually socialism for the wealthy and capitalism for the poor. The sole beneficiaries of governmental privatization has been and will continue to be large corporations and the wealthy class in America. Historically, governmental privatization has always led directly to rampant government corruption, less service and lower quality products at a higher cost to taxpayers. Privatization may very well become America's next great man-made nightmare by ultimately establishing monopolies, influencing public officials, and seeking to obtain tax breaks and hidden subsidies that are commonly used to enrich private individuals, corporations and investors at the public's expense. It will also have the undesired effect of undermining states by removing their revenue base, thereby transforming this government revenue into profits for domestic and foreign private-sector enterprises. Privatization experienced it's first great failure in the United States in 1823 in New York City and has consistently failed since.
1849 - Mayor Caleb Woodhull stated: “The system of cleaning the streets by contract has signally failed of fulfilling public expectations, and I assume that it is no longer entitled to public favor. At first it seemed to promise important advantages, both as to economy and efficiency, but in its operation it has proved entirely inadequate to accomplish either of these desired results. . . . I would therefore recommend an abandonment, as soon as practicable, of the contract system, and the entrusting of the entire business to the Superintendent of Streets, under the supervision of the proper department.”
1892 - The Chicago Board of Health declared: “There are few, if any redeeming qualities attached [to the contract system]. No matter what guards are placed around it, the system remains vicious.”
1895 - ”Mayor Pingree of Detroit expressed the view: “Most of our troubles can be traced to the temptations which are offered to city officials when franchises are sought by wealthy corporations, or contracts are to be let for public works.”
1999 - Author Moshe Adler summarized: “By the end of the 19th century . . . The realization that every possible improvement to contracting out had been tried led city after city to declare its failure. . . Practically all American cities discarded contracting out at that time and switched to governmental production.”
Now, imagine for a moment the colossal damage that could be wrecked upon the United States In the 21st century in a fully privatized country, with our propensity towards lack of accountability, our seeming inability to adequately punish white collar crime, our high speed computers, off-shore tax havens and the armies of corporate accountants and tax lawyers all waiting in the wings for just such a dream opportunity. An existing example of the potential damage that may be caused would be the decades old strategy of privatization of the emerging nations in the southern hemisphere by the International Monetary Fund (IMF) and the World Bank. This strategy has been used like a large club over the heads of many of these third-world nations seeking to acquire loans, with devastating results of rampant poverty (Except for the public officials involved), public unrest and disenfranchisement of their nation's natural resources. Does the United States also wish to be part of this decades long failed experiment in privatization?
Governmental privatization is misguided because it is based on false theories about how people behave and about biophysical reality. The real world is much more complicated and corrupt than economists believe it to be. A good example of economist's simple mindedness is the remark by the 2005 Nobel economist, Thomas Shelling, who stated that climate change is not much of a threat to society. His reasoning for this assertion was that climate change will impact mainly agriculture and forestry, which represent only three percent of gross domestic product. In this case, one could reason that a world without forests, plants or more especially, without food to eat, would be a world that would not require a gross domestic product, or anything else for that matter.
In the real world, governmental privatization operates less like textbook competition and more like a textbook monopoly or oligopoly. It will ultimately lead to a less capable and responsive government at a much higher cost. This misguided concept has now become favored in the U.S. (again) for it's ideological purity, rather than it's practical content and realism. The empirical record indicates several counter intuitive outcomes from privatization. For example, the cost to the tax payer will tend to go up, not down. More political influence occurs, not less. The 'to big to fail' concept will ultimately take hold and large corporations will begin to function less like businesses and more like the protection rackets of the early twentieth century. Clear examples of this may be found with Wall Street and the Military Industrial Complex who offer nothing tangible, just threats of layoffs, potential for recession, warnings about our safety or the potential destruction of our economy if they are not given their way. Addition of other industry 'complexes' would simply expand and exacerbate this problem. Higher taxes on large corporations and lower taxes on small businesses (within productive and beneficial industries) would tend to discourage this type of phenomenon. This would give disincentive to large corporations from getting larger and incentive for smaller businesses to remain small, efficient and effective.
The Government Finance Officers Association (GFOA) estimates that hidden and indirect costs of privatization can add up to 25% more on the typical contract price. Additionally, according to a 2007 survey by the International City/County Management Association, 52% of governments that brought privatized services back in-house reported the primary reason was insufficient cost savings and over 60% sited reduced quality of service as the motivating factor to discontinue privatization. Additional costs were also required to dedicate sufficient personnel and time to monitoring contracts. If not, the local governments would run a high risk of poor contractor performance and the potential of wasting large sums of taxpayer money.
A modern example of rampant political influence, corruption and the gross overcharging of American taxpayers would be the Halliburton corporation. Halliburton’s first Iraq-war related contract was a no-bid, open-ended, 7-year contract awarded before the war even began. Halliburton’s revenue from Pentagon contracts jumped from $483 million in 2002 to over $6 billion in 2006. We should also remember the Enron corporation that hid debt from its books in order to artificially inflate its value to shareholders and Enron's illegal trading in electricity which led to the California energy crisis in 2001 and the subsequent continual rolling blackouts and higher electricity costs that followed. If you remember these brief examples of privatization, you should also realize that these examples are just a few of the potential pitfalls that may be expected with governmental privatization.
Here's the basic problem; When considering privatization, it should be remembered that corporations have one objective, which is to increase profits over time by any and all means available to them (this is required by law and the shareholders). The very notion that we may replace a supposed government bureaucratic entity with an equally bureaucratic, private-sector, for-profit business model and thereby receive better products and services at a lower cost to taxpayers is quite frankly, breathtakingly naive and incorrect. The history of governmental contracting tells a very different story. The actual paramount objective of governmental privatization is to generate ever increasing profit for the private sector, where profit is achieved primarily by shifting the product or service cost to labor through layoffs, steep wage cuts and a significant reduction or total elimination of employee benefits. This scheme tends to impoverish the middle-class and working poor, while greatly increasing the profits and income of the large corporations and the wealthy class.
As wages have continued to erode over the past 30 years, wealthy individuals, large corporations and investors have searched for a new and reliable income stream to offset the lost buying power of the middle-class. This has been accomplished by capital investment in foreign manufacturing facilities to capitalize on cheap labor and relaxed regulations in underdeveloped or emerging nations. Another strategy has been to encourage and promote over-extension of credit (borrowing), to compensate for diminished wages. This has allowed an upward flow of revenue to the wealthiest Americans of roughly $1.5 trillion annually, while borrowing by the middle-class to supplement lower wages has accounted for roughly $1.0 trillion in annual debt. This unrestrained borrowing over time has accelerated income inequality and has continued to become more pronounced years after year, since the early 1980's. These unrealistic economic models have now combined to become very destructive to our nation's economic health and is virtually destroying the middle-class in America.
A third scheme to be exploited has now become governmental privatization. The development of multiple 'cooperative complexes', of similar industries, based on the Military Industrial Complex model of strength through consolidation of industry sectors and cooperative unity. This has the potentiality of creating numerous monopolies, all vying for larger tax cuts, greater tax subsidies, less regulatory constraint and higher profits from local, state and federal tax dollars. This will also tend to accelerate takeovers of smaller and weaker companies by large corporations in the pursuit of total dominance of individual industry sectors and thereby straining the anti-trust laws to the breaking point. With human nature being what it is, it's terrifying to contemplate a government that is based solely on quarterly or annual profit margins. The government would be forced to concede it's capabilities and strengths to that of the private sector, or more accurately, to that of a new class of Robber Baron. The government would no longer have the power or ability to ensure the health, happiness and safety of it's citizens and elimination of government expertise and capabilities would have the effect of potentially jeopardizing national security by decreasing the governments ability to react quickly, efficiently and effectively to threats and national emergencies once governmental privatization is fully implemented.
To gain a greater understanding of the potential impact and insidious nature of privatization, let's look at the United States Postal Service (USPS). This is perhaps the most blatant attempt to forcibly privatize a nationally valued and beloved institution we have ever before witnessed in America. The problem originates with a 2006 Congressional mandate by Republican leadership that requires the USPS to 'prepay' into a fund that covers health care costs for future retired employees for the next 75 years and accomplish this herculean task in a mere 10 years. This begs the question; Why is Congress forcing the USPS to fund health care for people who haven't even been born yet? This ridiculous political maneuver may force USPS completely out of business, if the meddling and the injection of one poison pill after another by Congress does not stop. The result of dissolving the USPS will allow privatized firms to replace hundreds of thousands of Unionized postal workers with non-Unionized labor in the private sector, thereby continuing the downward pressure on wages to benefit private sector companies and continue the 30 year war on the middle-class with continued pressure to to lower wages and benefits of the average worker.
The average consumer should expect an immediate and substantial hike in their delivery costs If the private sector manages to seize total control from USPS. What could possibly be the logic and rationale to force the USPS out of business? Could it be the price of this service? No, USPS is far less expensive with overnight packages being roughly 40 plus percent cheaper and a standard letter being roughly 90% cheaper than private delivery companies. Could it be the tremendous cost to the federal government? No, USPS is structured like a business, in that revenues from the sale of postal products generally cover costs, and it receives virtually no federal appropriations. Could mismanagement be the cause? No, the USPS is very efficient and effective and provides service to all Americans, without exception and it accomplishes this even with the constant meddling by the U.S. Congress. One of the primary complaints listed by the opponents of USPS is that it's a monopoly. In this case, ask yourself; What are the private sector delivery services attempting to create? The answer is simple, a (cooperative) monopoly. The difference is, the private sector monopoly would be far more expensive, less effective and would not serve all Americans. Americans should also realize the United States Postal Service (with Congressional oversight) is addressed in the constitution, UPS, FEDEX and DHL are not.
The next potential Military Industrial Complex like industry will be the privatization of our nations jails and prison facilities. Prison privatization is now pushing forward with potentially devastating repercussions and has been on the rise for 25 years now. Prison populations have increased by 500% over the past thirty years. Most of this exponential growth has been directly associated with the utterly failed 'war on drugs', however, laws in support of increased profits for prison privatization will most likely become more numerous, less fair and prison sentences may become much longer to ensure increased profits, both for the owners of prisons and their potential use of prison labor for private sector firms at slave level wages.
Prison privatization is a particularly terrifying situation because this not only threatens the potential for corruption of government and the judiciary, but also threatens the personal liberty of the average American, all in the name of corporate profits. It's a terrifying thought to tie something as invaluable as personal liberty to that of a bottom-line profit for a large corporation. Owners of private prisons insist they will not engage in lobbying activities of the government or the judiciary and that this is prohibited by law. This may be true at this time because private prisons now represent a small share of control, compared to that of our government, however, one must imagine that as their share of control increases, so does the potential for corruption and political influence increase. If this does happen, who will stop them and is it really worth betting our fellow citizen's freedom on?
Governmental privatization in general is a threat to the security, stability and economic strength of the United States. Government should do Government's work. In cases where governmental privatization is appropriate or allowed, contracting should be tightly controlled and meticulously researched prior to engaging in any form of government contracting. The government may also wish to consider the following list of cautions, if governmental privatization is to be used in the future.
1). Government MUST NOT privatize institutions that threaten the safety, health or personal freedom of the average American. In addition, the privatization contract must demonstrate the savings to taxpayers and how service quality and cost reduction has been improved under the contract for the end consumer. Privatized companies should be required to release this report annually.
2). Government MUST make no-bid contracts illegal under all circumstances and there should be a solid plan in each contract to revert back to governmental production if necessary.
3). Government MUST not sell, lease or make available to private-sector businesses any publicly owned land, forests, national parks or publicly held resources owned by the government (The People). Current and future government leases permitted by law should be thoroughly reviewed to ensure maximum benefit to both the U.S. Government and the private-sector with the least impact on quality of life for present and future Americans.
4). Government should Increase punishments for white-collar crimes and strictly enforce them.
5). Government should enhance anti-trust laws and strictly enforce them. Lack of enforcement by the government has been the primary cause of failure of privatization in the past.
6). Government should charge an annual monitoring fee based on anticipated cost to the government. This fee should be added to all contract bids automatically and should allow for adjustments to monitoring costs, if necessary. Taxpayers should not be monetarily responsible for the cost of this necessary function.
7). Government should retain a minimum of 20% government control of all privatized industries by which to accurately judge cost, performance and quality standards against a known competitive base.
8). Government should establish a minimal living-wage and benefits package that all contracting companies must provide to employees who are engaged in government contracts.
9). Government should run it's affairs more like a profit-centered enterprise. This would entail insistence on high standards of performance from all contractors engaged in government work and consistently enforce these standards without compromise.
10). Government should monitor the weaknesses and inadequacies of privatized contracts and develop additional laws or regulations as necessary.
11). Government must ensure that all costs of maintenance, production and all potentially hidden costs that may redound, if not considered, to the federal government and should be added to the initial agreement/contract, down to who will pay for snow-removal if necessary.
12). Any and all government subsidies used for privatization should be meticulously reviewed for fairness and the potential benefit and return on investment for the average American.
America is now at a crossroad. Do we again place value and trust in our government or will we place trust in the private business sector to intelligently and fairly run our nation's most important functions? The general rhetoric since former President Ronald Reagan suggests that government cannot be trusted and the private business sector may be relied upon to solve all of our nations problems. This assertion is perhaps as absurd as the concept of governmental privatization itself, which seeks to place business in the position of total power and economic strength. The historical record indicates that private industry is ill equipped to efficiently and effectively perform vital functions of government without engaging in political corruption, crony capitalism and the degradation of the standard of living for working Americans. The actual intent of privatization in the long run is to shrink the size of government in a very unhealthy way and then, in the now infamous words of conservative lobbyist Grover Norquist, “I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
In closing, the government has been the only consistent driving force in our nation from the beginning and should be defended for it's tremendous accomplishments and overall value to the average American. The U.S. Government has kept this country prosperous and safe for 224 years now. It has fought and won numerous wars when our country was threatened by outside forces. It has been instrumental or responsible for the development of many of the patents issued that have dramatically improved the lives of not just Americans, but people all over the world. It has kept Americans safe through the implementation of Police, Fire and emergency personnel. It developed the internet that businesses tremendously profits from. It built, first the railroads and telegraph and then our modern system of roads, super highways, bridges, telecommunications and all the other infrastructure that makes modern life more comfortable, profitable and stable.
The U.S. Government has brought about an environment of equality for all of it's citizens and the opportunity to grow and prosper in a country that places the citizen's rights above that of the government. It has placed a man on the moon, fostered educational and research grants and publicly funded Universities, which have conquered diseases, extended life and increased prosperity through modern medical, technical and scientific advancements that have allowed private industry to thrive and handsomely profit from a collective will of our people that we should affectionately call our government.
As one of our nation's Founders, the second president of the United States, John Adams eloquently stated:
"Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men; therefore, the people alone have an incontestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity, and happiness require it."
To:
The President of the United States
The U.S. Senate
The U.S. House of Representatives
President of the United States (President Obama)
Please Stop Privatization to Eliminate Crony Capitalism and Higher Taxes.
Sincerely,
[Your name]
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