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Thread: The Government in the Private Sector

  1. #1
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    Default The Government in the Private Sector

    As I watch the very expensive & expansive bailout effort & it's success or lack thereof, I'm wondering about the arrogance of the bureaucrats believing that they can productively salvage or accomplish anything. As Booty said, think Mustang Ranch!!!!

    But that's not what started this thought process. As governments are looking for new sources of wealth to continue living on the high side of the hog, they are intruding into areas that the private sector can better handle. I find that trend disturbing. & I'll provide a couple of examples for your thought in another paragraph.

    What really started this was a comment made by Mark Steyn in the National Review discussing Nanny Statism - "Under the Swedish model, state spending accounts for 54% of GDP. In the US, it's about 40%. Ten years ago, it was 34%. So we're trending Swedish." A little scary, IMO anything that disappears through taxes is non-value added.

    Some examples, in our little city of 5K & 1.5 K families the city owns beyond the usual the NG company, the Water company, the Cemetery & the Storm Water drainage facility. They also own the Sewer system. Does anyone believe the city should be involved in these pursuits?

    Another WA city purchased 10 acres of existing wetlands - their goal being to sell Wetland Mitigation to those developers in need. This leads to a couple of questions - 1) if it's already wetlands how can you mitigate it? & 2) is there a conflict of interest? They have wetlands to sell, How can someone private sell the same thing with them in the chain & do they see a property being developed that is marginal being placed in a higher classification so they can sell more of their stuff.

    & I won't even put stadiums & event centers on the table.

    But I see this sort of action happening all over the state & believe it to be anti competitive. But then again, I see a lot of functions controlled by the bureaucrats that would be better left the private sector.

    Your thoughts?
    __________________________

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    Someday your life will flash before your eyes. It's your responsibility to make sure it's worth watching!

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    I agree--government would screw up a one car parade! And, government has no business getting involved in the free market. On that, I'm as conservative as Adam Smith!

    In San Antonio, our electric company is owned by the city. The service is phenomenal, the rates the second or third lowest in the nation, AND the profits the company makes (about $50 million per year) are kicked back to the city. Our city always runs a surplus thanks to CPS energy.

    Bureaucrats rarely know how to make money because they've never had to do it before. That's why taking partial ownership of he bailed-out companies scares the hell out of me.

    My conservatism on this one shocks you doesn't it?

  3. #3
    Senior Member Hoosier's Avatar
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    How about cities using property tax to dictate land use. In my area it's not uncommon for them to raise taxes on a piece of property the city would like developed to the point the owner can no longer afford to hang onto it and sells to a developer. I know several people that the city of Woodbury has done this to. The property will generate more income for the city broken up into lots then as a farm.

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    Senior Member YardleyLabs's Avatar
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    Quote Originally Posted by Marvin S View Post
    As I watch the very expensive & expansive bailout effort & it's success or lack thereof, I'm wondering about the arrogance of the bureaucrats believing that they can productively salvage or accomplish anything. As Booty said, think Mustang Ranch!!!!

    But that's not what started this thought process. As governments are looking for new sources of wealth to continue living on the high side of the hog, they are intruding into areas that the private sector can better handle. I find that trend disturbing. & I'll provide a couple of examples for your thought in another paragraph.

    What really started this was a comment made by Mark Steyn in the National Review discussing Nanny Statism - "Under the Swedish model, state spending accounts for 54% of GDP. In the US, it's about 40%. Ten years ago, it was 34%. So we're trending Swedish." A little scary, IMO anything that disappears through taxes is non-value added.

    Some examples, in our little city of 5K & 1.5 K families the city owns beyond the usual the NG company, the Water company, the Cemetery & the Storm Water drainage facility. They also own the Sewer system. Does anyone believe the city should be involved in these pursuits?

    Another WA city purchased 10 acres of existing wetlands - their goal being to sell Wetland Mitigation to those developers in need. This leads to a couple of questions - 1) if it's already wetlands how can you mitigate it? & 2) is there a conflict of interest? They have wetlands to sell, How can someone private sell the same thing with them in the chain & do they see a property being developed that is marginal being placed in a higher classification so they can sell more of their stuff.

    & I won't even put stadiums & event centers on the table.

    But I see this sort of action happening all over the state & believe it to be anti competitive. But then again, I see a lot of functions controlled by the bureaucrats that would be better left the private sector.

    Your thoughts?
    In 2007, total government spending (state, local, federal) was about 35.5% of GDP and in 1997 it was about 35% (http://www.usgovernmentspending.com). Federal government spending has actually declined over time as a percentage of GDP. The cost of government spending and health care expenses has grown substantially as a percentage of GDP because of the growth of health care costs. If the government assumed all of the costs of health care (which no one is proposing), the proportion of the GDP going through government would increase significantly, but I'm not sure what that would mean to the economy. It would depend on how the involvement of the government affected health care spending overall.

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    Quote Originally Posted by M Remington View Post
    I agree--government would screw up a one car parade! And, government has no business getting involved in the free market. On that, I'm as conservative as Adam Smith!


    In San Antonio, our electric company is owned by the city. The service is phenomenal, the rates the second or third lowest in the nation, AND the profits the company makes (about $50 million per year) are kicked back to the city. Our city always runs a surplus thanks to CPS energy.
    One must always ask where they would be if the utility were in private hands. What is the long term cost? The folks employed at the utility are probably considered public employees so they will enjoy a level of compensation not enjoyed in the private sector. What entity pays for that including their retirement? How much are investors like myself benefitting from that investment - everyone getting the benefit is a form of socialism? Does this entity enjoy a different position as public power is doled out to the various electric companies? & what does the city do with those profits? Build a new arena for the Spurs? A playground for the wealthy. Or did it go to Riverwalk to upgrade the tourism industry?

    Bureaucrats rarely know how to make money because they've never had to do it before. That's why taking partial ownership of he bailed-out companies scares the hell out of me.

    My conservatism on this one shocks you doesn't it?
    Every industry has a culture, the interference of the government except by policy is unwarranted seizure (WAMU is suing the FDIC) & will eventually change the culture of that industry, generally not on the positive side.

    As for your being a teeny weeny bit conservative - - please! You didn't show that in your second paragraph.

    Many years ago a political friend of mine (who knew I had no interest in being involved in money grubbing political contests) asked me it I would be interested in managing a campaign for someone he thought to be conservative. I told him I would have to interview the person, which was done over lunch. At the luncheon, questions were asked & philosophies were discussed & I declined the offer. My friend asked me later why I had declined the offer & I said "It was evident from the conversation that the candidate's instinct's were left of middle of the road though the candidate mouthed all the right platitudes, sincere conviction was not evident". The candidate lost the election but later got elected to a City Council position, where their true colors were shown.

    My friend rose in the political world, but on occasion would ask me to go to lunch with someone to vet them. BTW - my friend was a social conservative & behind his name had an engineering PHD so was a brilliant person & great to talk to - we just avoided the RTL conversation. He also did abyssmallly poor on the fiscal end of controlling runaway budgeting.

    But keep trying - if your goal is acceptance within the fiscal conservative ranks - it's going to be a long trip, but certainly a worthy goal.
    __________________________

    Marvin S

    Everyone's friend is No One's friend

    Someday your life will flash before your eyes. It's your responsibility to make sure it's worth watching!

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    Quote Originally Posted by YardleyLabs View Post
    In 2007, total government spending (state, local, federal) was about 35.5% of GDP and in 1997 it was about 35% (http://www.usgovernmentspending.com). Federal government spending has actually declined over time as a percentage of GDP. The cost of government spending and health care expenses has grown substantially as a percentage of GDP because of the growth of health care costs. If the government assumed all of the costs of health care (which no one is proposing), the proportion of the GDP going through government would increase significantly, but I'm not sure what that would mean to the economy. It would depend on how the involvement of the government affected health care spending overall.
    Your source is a little confusing, but thanks anyway - guess I haven't hit the correct button. I've had no reason to disagree with Mark Steyn but if what you state is true will have to double vet prior to posting. I just figured it to be somewhat accurate due to the war on terrorism.

    But on Health Care - it is small wonder the costs are rising. When you give a person a ready made position at 317K per year that disappears when that person leaves, was there any original value? But the costs were covered by a $1 Mil earmark by her Senator husband, which means you & I get to pay.

    At the figures we are talking .5% is in itself significant, especially with the frightfully ambitious unproven proposals being advanced from the POTUS, .5 will look like chump change.

    The April 2009 issue of Conde Nast Portfolio has an article called "Pipe Dreams" which is about the NG pipeline coming or not from the North Slope, which if true is very unflattering toward "Sure Shot" Sarah. You might want to read it. The magazine is too new to my realm for me to know where they lean but does have some very good articles,
    __________________________

    Marvin S

    Everyone's friend is No One's friend

    Someday your life will flash before your eyes. It's your responsibility to make sure it's worth watching!

  7. #7
    Senior Member brian breuer's Avatar
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    Quote Originally Posted by Marvin S View Post

    Some examples, in our little city of 5K & 1.5 K families the city owns beyond the usual the NG company, the Water company, the Cemetery & the Storm Water drainage facility. They also own the Sewer system. Does anyone believe the city should be involved in these pursuits?

    Another WA city purchased 10 acres of existing wetlands - their goal being to sell Wetland Mitigation to those developers in need. This leads to a couple of questions - 1) if it's already wetlands how can you mitigate it? & 2) is there a conflict of interest? They have wetlands to sell, How can someone private sell the same thing with them in the chain & do they see a property being developed that is marginal being placed in a higher classification so they can sell more of their stuff.

    & I won't even put stadiums & event centers on the table.


    Your thoughts?
    I won't comment on the cemetery because I know nothing of that business. Water, sewer and public works is what I do. (civil engineer) I am curious, who do you think should own the water plant? At least water use can be metered. So, maybe a model like the phone company?
    Storm sewer is even harder to imagine as a privately run business. No way to meter, nearly impossible to determine rates, no incentive for the owner to do maintenance, only collect fees. What don't pay your bill so we plug the pipe and we flood you out?

    Totally agree with you on the wetlands. Sounds like something is amiss there. The city which is responsible for zoning, permits, etc and basically controling who can and can't build with its permits shouldn't be in the development biz. Way too much of a conflict of interest.

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