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Taxation And Privatization

photo: tarabrown (flickr)

Conservatives in both parties have been pushing the idea of privatizing government functions for years. One unspoken reason for this is that there is far more private capital than necessary or useful in meeting the needs of the private sector for new capital investment. A lot of that money is used for speculation or for investment overseas. Now the problem is even worse, because real returns from productive investment are likely to remain low for the foreseeable future as Americans try to restore their balance sheets and try to save for retirement in the face of conservative demands for slashing Social Security and Medicare.

At the same time, there is not enough money available in the public sector to meet its massive and growing needs. Bridges are failing, sewer systems are failing, water is growing scarce, our electrical transmission system is aging and inadequate, our power-generating systems pollute and will grow more expensive, our schools are dilapidated and strained. The list of needs is endless.

We could pay for massive and necessary infrastructure repair by taxing the excess wealth of the tiny number of very rich people instead of borrowing from foreign nations. These projects would put people to work on necessary projects, not just laborers, but administrators, IT people, engineers, and planners.

Conservatives of both parties reject the idea that we should pay taxes. They claim that the only way forward is to slash spending, fire government workers, terminate agencies and regulations, and, lest I forget, cut those deadly earmarks. We’ll get a good test of this idea in England, which is following their prescription.

Conservatives of both parties believe this will somehow jumpstart the economy, increase consumer demand and restore conservative values. lt won’t, but let’s pretend. Where will this new, lean, non-taxing and non-regulating government get the money to fix the sewer system so that raw sewage doesn’t flow into the river after a two inch rainfall, or repair those crumbling bridges built by the private sector?

Conservative of both parties tell us that the market will provide. And that’s where privatization comes into play. Hyper-rich rich people will use their untaxed cash to buy our crumbling bridges and repair them. We’ll sell them our crumbling subway system, and they will make it work and sparkle. We’ll sell them our schools so they can educate our children. We’ll sell them our water and sewer systems. We’ll sell them the Interstate system and the parking rights in our cities. That list is also endless.

There is the matter of paying for all this. We are assured that corporate persons can do this at a great price to us humans, which we can pay out of our tax savings. We can subsidize the poor with all the money we get from selling our public sector. Then we can pay tolls for traveling from city to city, or we can stay home if we can’t afford to pay. Those of us who use water will pay for our water at market rates, whatever that means.

None of these conservatives has a clue about basic economics. Monopolies exploit their economic power. When one company controls the entire supply of some good, every economic theory says it will extract monopoly prices from those who must have the services, like people who want to park in Chicago.

Enough pretending. There isn’t any magic, and this won’t work. This pseudo-Randian garbage is a mask to hide the ugly demand of hyper-rich corporate and human persons for high-reward, low-risk investments. They don’t want to own bridges, because they can’t make money off them yet. They want schools because they can extract tuition money from parents and subsidies from taxes. They want prisons because they can build new ones, depreciate them, and insure a solid profit by cutting wages and benefits to prison guards, all subsidized by taxes. They want water systems because they can eventually make a fortune selling our dwindling water supplies to the highest bidder, and get subsidies from taxes. They want monopolies so they can extract monopoly profits. They want to use the enforcement powers of government to force payment.

Conservatives of both parties want a society that will come to look like Bladerunner. There is nothing in that society that holds us together as a people. There is only the struggle to survive as individuals.

One of the tools we can use to prevent this grim outcome is taxation. Our species succeeded by mastering the use of tools to solve problems. Conservatives of both parties want to abandon the best part of us homo sapiens.

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