The Wall Street Journal reports that the beleaguered Greek government is going to privatize state assets as part of an effort to reign in its crushing debt burden. America’s mounting debt will reach Greek proportions on our present path, so U.S. policymakers should start looking at privatization as well.
Among the Greek government’s “eclectic” holdings that could be sold off are ownership stakes in banks, casinos, a water utility, oil refinery, and a telecommunications company. Standing in the way will be unions, which are already riled up over the privatization of a container terminal in an Athens port.
Like Greece, public sector unions represent an obstacle here as privatization would threaten the excessive compensation and job security they’ve secured. However, federal policymakers need to muster the courage to move forward. Privatizing federal assets and programs could put a dent in the debt. And unleashing the private sector to make more productive use of these assets and activities would foster economic efficiency and growth.
The following are some targets that policymakers should consider:
- U.S. Postal Service. Technology, labor costs, and congressional mandates make it unlikely that the USPS can survive in the long-run. Nor should it. Countries across the globe are subjecting their government postal monopolies to competition from private mail carriers, with positive results.
- Amtrak. Created in 1970, Amtrak was supposed to become self-financed. Forty years and $37 billion in federal subsidies later, it provides second-rate service while its infrastructure continues to deteriorate. It’s plagued by the same problems that afflict the USPS: burdensome labor costs, congressional meddling, and potential customers’ preference for other forms of transportation.
- Air Traffic Control. The Federal Aviation Administration has run a mismanaged air traffic control system for decades. Its technology is outdated, and its upgrade efforts have often fallen behind schedule and gone over budget. The U.S. should look abroad for solutions. Canada, for instance, successfully privatized its air traffic control system by setting up a private, non-profit corporation that is financed by user fees on aviation users.
- Federal Assets. The federal government has almost 900,000 buildings and structures with a total area of 3.29 billion square feet and more than 41 million acres of land (not including federal parks and forests). In fact, the federal government owns about one-fourth of the land in the United States.