Sunday, January 22, 2012

Things Republicans could do to make me take them seriously - Public / Private partnerships

In a democracy laws are often compromises that are less about finding the best solutions than they are about giving everyone something to make them happy.  So we end up with laws that don't work for anyone except the special interests who know how to work them.  One common compromise has been to make government programs "public private" partnerships.   Generally that means private folks put up some money and take home any profits the entity produces, while public entities absorb the losses.

Public private partnerships are almost always a disaster for taxpayers.

Fannie Mae and Freddie Mac grew out of a pragmatic desire to allow more people to own homes.  But some in Congress who were representing the interests of Financial institutions used their influence to give Financial institutions a cut of the action.  The public private hybrid managed to have the worst characteristics of both and the best characteristics of neither.

Higher Education and Health Care are two other areas Congress has melded an amalgam of government functions with profit motivated private business.  For the last three decades costs for both have risen much faster than inflation, as our systems are subject to few of the controls of the marketplace.

History seems to have demonstrated that if we think some problem needs to be addressed by a Government program, it should be government only program,  Public/private partnerships are a bad idea for everyone but the investors who will be milking the taxpayers.

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