David Morris: And the Winner Is ... the Public Sector
Unlike the public sector, the private sector is bred for efficiency. Left to its own devices, it will always find the means to provide services faster, cheaper, and more effectively than will governments.
-- James Jay Carafano, Private Sector, Public Wars
I suspect the vast majority of Americans would agree with Mr. Carafano. They probably consider the statement self-evident. The facts, however, lead to the opposite conclusion. When not handicapped by regulations designed to subsidize the private sector, the public sector often provides services faster, cheaper and more effectively.
Consider the results of recent privatization initiatives in three key sectors: health, education and national defense.
Health
Alone among all industrialized nations, the U.S. relies on private for profit insurance companies to manage its health care system. The result? The U.S. has by far the most expensive health care system in the world both in total cost and as a percentage of GDP.
But we don't have to look abroad to evaluate the comparative costs of private and public health systems. Consider Medicare.
Small privatization efforts under Medicare began in the 1980s but did not become full-borne until 1997 when the Republican Congress, with the support of President Clinton, created Medicare+Choice. Secure in their faith that the private is always superior to the public, the Republicans agreed to a program in which private insurers would receive the same amount as the service cost under Medicare.
The public sector proved uncompetitive. Private insurers began pulling out en masse. In 2000, more than 900,000