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Privatizing Federal Assets And Operations

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Most people agree that federal organizations such as the US Postal Service and Amtrak are far from being efficient. However, little has been done to improve their operations. On this matter, Chris Edwards of the Cato Institute makes a number of interesting points in Downsizing The Federal Government. Edwards argues for the privatization of several federal assets and operations. His recommendations include:

  • Ending subsidies to passenger rail and privatizing Amtrak
  • Privatizing the U.S. Postal Service and repealing restrictions on competitive mail delivery
  • Privatizing the air traffic control system, the nation’s airports, seaports, federal electricity utilities, and parts of the Army Corps of Engineers
  • Selling excess federal assets, including buildings, land, and inventory

Edwards points out the advantages of these privatization efforts:

“Privatizing federal businesses and infrastructure would allow new managers to extract greater efficiencies out of existing assets and to improve customer services. Private entrepreneurs can often innovate where government workers cannot, and they can more easily end unneeded and failed activities.”

These steps would foster economic growth and lead to higher performance. Many European countries have already privatized government-owned businesses: Italy privatized its postal service, Germany its rail system, and Britain its British Airline Authority. The United States should pursue the same path and let private entrepreneurs take over inefficient public businesses, improve customer service, and make more efficient use of existing assets.

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