numonex said:
Cutting spending is one way off reducing government spending by cutting inefficient public sector jobs and privatising public services for short term funds to pay back debt. Transport, utilities, national parks and government housing can be sold off to the highest bidder. Reduce public sector, increase the private sector and everyone is better off. Public assets can be sold off by governments as well to multi-national companies for the highest bidder. Privatisation offers freedom and choice to consumers. More competition can be encouraged by selling off public assets to multiple competing multi-national companies. Multiple companies can compete freely against each supplying water to consumers on a free market. |
While it is not (necessarily) a common thought for economists sometimes a benign monopoly is the most inexpensive and efficient way to deliver goods and/or services. These are typically in areas where building larger infrastructure results in long-term cost savings due to economies of scale, and the recurring costs are relatively small compared to the initial start up costs of a facility. Classic examples of this are the electrical and water utilities.
Unlike most other government services, the user-fees of public utilities tends to mean that they are not a drain on government finances; and quite regularly pull in profits. If the government privatizes these utilities without reducing spending elsewhere they will receive a one time lump sum payment but their incoming revenue will be lower; and with how massive government deficits are today, it would be a very short period of time before the debt that was "paid down" returned on governmental balance sheets.
There are areas where privatization makes a lot of success (in Alberta we have privatized liquor stores and registry services [read: The DMV] with amazing results) but utilities like water doesn't make sense.
With that said, the core problem is that governments are spending far too much money and there is little/no reason to believe that they are getting positive results from their spending.
