The US is expected to hit the high-water mark of its federal debt limit by Monday and politicians are scrambling to cope—be it through raising the national debt limit or by selling off all the country’s assets—gold, highways, federal lands, buildings, etc.—in a huge-ass federal fire sale:
Economists of a conservative or libertarian bent have long argued that the federal government needs to get out of certain businesses, unload unneeded assets, and privatize such functions as passenger rail service and air traffic control. No one advocates selling Yellowstone, but why, some economists ask, should the federal government be in the electricity business?
Economist Kevin Hassett of the American Enterprise Institute said the federal government should consider the sale of interstate highways. Motorists would have to pay tolls to the private owners, he said, but the roads would likely be in better shape. Federal, state and local governments could raise hundreds of billions of dollars through highway privatization, he said.
Selling off bulk chunks of federal land, as some conservatives are proposing, is a stupid fucking idea. But what about this highway thing, or the gold thing? I mean, miles of roadway and tons of gold are just sitting there. Maybe we throw conservatives a bone, sell off a few highways, and make a little cash money for the country. Yes, private highway owners will toll their roadways, but ultimately, is that a bad thing? If we’re going to do it, and we need the money, let’s do it now because the only way to implement a conservative idea is with a democratic majority (it cuts through a few layers of crazy, at least).
Discuss.
My first question is, What happens to the taxes that pay for the highways? Presumably the feds won’t lower the income tax (for those making less than $200k, that is). Will state gas taxes disappear?
I’d suggest auctioning off politicians instead, but they’ve already been bought and paid for.
Another question is, won’t there still be a need for some sort of oversight? Interstates and US highways all have to conform to certain standards, even if the work is left to state highway departments. Leaving that up to the market would probably mean rundown roads – you know some companies will just let things go to pot in order to maximize profits. Or will unnecessary parallel roads be built in the name of competition (and sprawl?)
A few years ago, here in Colorado, some dope wanted to build a toll highway called the “prairie parkway,” which would run parallel to I-25 from south of Pueblo (which is 100 miles south of Denver) to north of Fort Collins (near the Wyoming line), but running mostly about 30 miles to the east, skipping all the major cities and towns.
No one ever made money on passenger rail. It was subsized by the government during the private years via the mail contracts. When the USPS cancelled the mail contracts, the railroads clamored to be let out of the responsibility of running the trains. That’s how we got Amtrak.
Privatizing the insterstate sounds like an absolutely dopey idea, so the conservatives should love it. I say go for it, with the provision that whoever ends up owning them has to pay property tax on them.
And private air traffic control will be wonderful until the first horrific crash caused by some dumb private enterprise solution.
I wish this country would learn from its mistakes and stop trying to beat the square peg of Reagonomics into the round hole of rationality and mature society. But, on the other hand, that’s part of what makes living here so interesting.
Privatizing utilities always turns out so well.
I’m generally against privatizing services that are most efficient when there’s only one of them (phone line to your house, water line, highway from here to California). But then I’m also against the massive amount of money we pay for our highways. I could be convinced this is a reasonable idea, assuming we keep regulatory control over prices. And maybe just lease the roads for 50 years (in case we want the right of way later for rail).
yet another scam foisted on us by the rich. get ready for higher costs & worse roads while the private road owners make out like bandits. how stupid is anyone to consider this anything other than another ginormous give away to the rich? cienna, you should be ashamed of yourself.
Mass transit and bikes would not be immune to tolling. So this would be a bad thing. If you live in Lake City, but work in DT Bellevue. Toll to get onto I-5, toll to exit onto 520 (or I-90) toll to exit onto 405. No slow downs because its all automated but in a worst case scenario, the morning trip might cost 10$ in tolls, one way, just to get to work.
Imagine driving down the freeway, and every couple of miles running into a toll-booth; not the every 20 or every 50 miles sort of toll-booths you see in the Northeast, but every COUPLE OF FUCKING MILES! Because, a bunch of private corporations have bought up all the concrete and are now free to charge drivers (who previously paid to build those roads out of their tax dollars) whatever they want to use it.
Or: Imagine you’re driving from your home to the freeway. You get to your on-ramp only to find it’s been closed. The company than now owns that section of freeway discovered they weren’t making enough money off toll traffic at that location, so they shut it down, forcing drivers to use an alternate on-ramp five – or ten – or twenty miles away, because it’s more profitable.
Whenever a piece of PUBLIC infrastructure gets privatized, the PUBLIC gets screwed. Haven’t we already had enough examples of this to KNOW it’s a “stupid fucking idea”, as Cienna says?
No.
However, all road projects should be funded through use fees: gas taxes, tolls and vehicle registration, and subsidies for the oil industry should end. THAT would be a huge wake-up call for everyone as to the true cost of our automobile infrastructure.
ultimately, this is about exactly the same thing as everything else going on in our government… shifting the burden of costs more & more & more to the middle class & the poor. so we still pay the same gas taxes, and under privitization we get to pay for tolls too. it’s really the ultimate win for the rich, not only do they shift the costs of infrastructure further onto the populace, they get to take a huge profit right off the top.
Yes, ultimately it IS a bad thing. Private companies do what private companies do best: maximize their profits. And there’s nothing wrong with that, it’s exactly what they’re created to do.
Yet in the case of roads, electricity, water, etc–in short, the necessary infrastructure to support robust economic vitality–the goal, the best possible public good, is found not in maximizing profit for a single private company, but in maximizing the ability of all private companies to be profitable. And at that, government–not driven by profit–is far better suited than private industry to excel.
The tax money raised annually–and indefinitely— from a vital economy lubricated with an easy, low cost transportation & energy (& information, I might add!) infrastructure that operates at cost rather than for profit, more than exceeds the selling price of the individual elements.
Even forgetting all the political & social ramifications, from strictly simple a profit/loss standpoint, it would be just plain bad business for the government to privatize its infrastructure.
This is one more step in their efforts to completely dismantle the Federal Government. They want to privatize everything. Companies, accountable to no one but the mythical free market, will run everything in their world.
They are attempting to create a corporate dictatorship. Why is this even a discussion? Is it a bad thing? Yes. Of course this is an awful idea.
Unless you like living as a goddamn serf.
Because government asset firesales did so much good in Eastern Europe…
How much history can the Libertarians ignore? All of it, or just most?
Horrendous idea. We already paid for the interstates. We paid a lot. User fees should pay for the upkeep- gas taxes and such.
Also if they are privatized, drivers will be paying out of pocket to use them. Do you realize that user fees like gas tax and such, only pay for 1/3 of road construction and maintenance costs? The other 2/3rds are paid for out of general funds? If a private company starts charging 100% of the costs, and tacks on a 30% profit, there will be a war. People will go apeshit if they knew the true cost of driving. And because the costs are so high, everybody will start trying to travel surface streets.
How do you think that will affect prices of goods and services? How do you think that will affect tourism? If it happens, do you think our taxes will suddenly go down because the government is no longer paying for roads? LOL!
Stupid idea all the way around!
Yes, because private highways work so great in….ummm….remind me what countries has private highways?
They are mostly in Latin America and Africa, wonderful examples to follow when it comes to good governance principals.
What if a private owner of a highway shuts down service in Wyoming because it is deemed unprofitable? Sorry Wyoming, you should have thought about the invisible hand of commerce before siting your stupid state in such an unprofitable location. I think we know who we can blame for this whole federal highway mess…. our country’s most liberal president, Eisenhower.
The two main sources of gross resource misallocation in the economy due to government subsidies are 1) farm subsidies for corn and soy and 2) road subisides for long stretches of highway through sparsely populated areas.
The first gives us our grotesque meat and sugar centered food supply. The second gives us our anti-local environmentally destructive freight trucking driven supply line.
Any classical economist would insist on fixing these first before worrying about other ways in which the government distorts the economy.
Selling off public resources makes for short-term gains. We’d have a few years of wealth and then, so many years down the line, a bunch of shitty toll roads that a handful of companies are making money off of. They would only enjoy as much maintenance as is required to meet regulations, so little would change in terms of quality.
So yeah, shitty plan from short-sighted assholes.
We’ve already had a preview of sorts of this type of privatization with the deregulation of the airlines. That started a 30 year race to the bottom: bankruptcies, union busting, increasingly poor service, nibbling fees.
Privatizing the interstates would be similar in that there would still be some pesky regulations that would magically prevent profitability unless some new fee were added. Or, maybe we just need to get rid of those regulations and let the amazing market decide.
Once you get rid of those regulations, then maybe the owners of the roads can start to determine what type of car would be allowed on their roads. Or that drivers need to have a certain, new form of insurance. Then we find that only white people can get that insurance. (Proceed farther down rabbit hole.)
There is a reason people have banded together for centuries to create free roads and other public services, and it was not profit motive.
So, let me get this straight-
Ms Madrid wants the federal government to abandon the constitutional federal burden of interstate transport, but retain the unconstitutional one of supporting Planned Parenthood?
I’m so confused.
If motor vehicle fuel taxes (“gas taxes”), both state and federal, had kept pace with inflation and increased fuel economy over the last 40 years, there would be more than enough money to maintain all of our roadway infrastructure.
But because we’ve drunk too much of that conservative Kool-Aid (“all taxes are too high and should be cut, or at least never, ever increase them”), that doesn’t happen — and people who should know better complain about the lack of maintenance.
So here I am, basically missing from Slog for two years due to my giving up a desk job to go back to school. I come back to my old job for the summer, go visit Slog, and THIS is what happens. Lame.
If you’re gonna privatize a road, make it the roads the state is forced to build at taxpayer expense whenever some developer gets a wild hair to build a 400 unit burbclave out in the middle of nowhere.
Because Enron, that’s why.
Public Private Partnerships (P3s) are excellent for governments, citizens, and the companies that operate the assets.
What many of these comments fail to point out is that the P3 contracts between the governments that own the assets and the corporations taking them over are immensely complex and restrictive. Price controls about tolls, and how quickly they can rise. Covenants about maintenance, and safety, and whatever else you can imagine. Basically the governments can set the terms of the contract, and if any corporation feels they can make money on the venture, they put in a bid. If the restrictions are too onerous, and the investors feel (after extensive research and financial modeling) that the potential profits do not justify the risk, then the state continues to own and operate the asset (the status quo).
We should sell the 520 bridge to Goldman Sachs. Thorough betterment
Yes, because long stretches of privately-owned tolled highway will be well-taken care of. I’m sure those owners will have every incentive to invest their tolls into road care, and won’t spend a dime of it on things like salaries and return on investment. Because if they don’t take care of their highways, someone will… I don’t know… build competing ones right alongside them?
Another question: What will then happen to all the State DOT employees? Will they lose their jobs, to be replaced (or re-hired) by private sector workers? Assuming that one way the private sector claims to increase efficiency, maybe a third of the jobs will be shed in that transition.
So this idea would eliminate jobs.
Aren’t the Republicans on a gung-ho streak where they decry everything they hate as “Job-killing” ? As in “Job-killing health care reform”, “Job-killing tax increases”, and “job-killing contraceptive services to low-income women” (okay, I made that last one up).
So how can any fruitcake libertarian or conservative ever support as utterly nutty as- oh, never mind. I think I answered my own question.
If there are toll booths every three miles and it costs so damn much to drive, that’s a good thing. Higher transportation costs will in the long run encourage denser city living (with all the reduction in greenhouse gases that implies), travelers will choose train or plane travel when they need it, and in the meantime there will be lots of revenue for schools and such.
So where’s the bad part of this? The inconvenience for a few years until people have fundamentally restructured their lives to minimize the annoyance of toll roads? Come on, objecting sloggers. You didn’t think people would make sustainable choices just out of the goodness of their hearts, did you?
Essentially Facebook privatizes government itself.
Speaking of confusion, SB, you feel that funding planned parenthood is unconstitutional, even though none of it is for pregnancy termination, but you support abstinence only education.
Hmmm.
Proper highways needed for emergency services to operate might be a good ground level for what a private company can do with highways, and with out being end current traffic flows (the closing of ramps commented on above).
Let’s see what the past Republican schemes produced. The Savings and Loans were looted and the tax payers got the bill. Then they cooked up the Wall Street schemes and the homes and 401Ks were looted and the taxpayers got the bill. Now they want to loot the entire government? Are we the stupidest people to ever walk the fucking earth???????
@32
My objection to Planned Parenthood funding has nothing to do with abortion. It has everything to do with the federal government acting outside the very limited mandates the Constitution established.
I could say the same thing about any welfare program, Social Security, farm subsidies, the Department of Education etc. The individual states may well have a role to play in these, depending on their own founding documents. But the federal government has no legitimate business in any of them.
And where did I say anything about sex ed, ever? As it happens, I don’t want the school doing the job my wife and I have, inculcating values in our children. Age appropriate and accurate information as to sexual function and activity from the school present no problems for me.
I second what Timrrr @13 said. The cascading ramifications will be bad for the economy as a whole.
If the republitards want to experiment with privatized roads, why not pick the most conservative state in the union, privatize all their roads for a 5 year experiment, and see how it goes. Don’t foist it on 300+ M people at once. (Or ever).
Yes, privatization… so good for the jails!
And hey, Michigan privatized road maintenance a half-decade or more back… look what happened, roads in worse condition and more expensive maintenance. Fancy that.
@34
Liberals? Oh beyond any doubt! But console yourself, Republicans will clean up your messes, if only to save our country.
@ SB, I apologize for that – I was sure you had written in favor of that elsewhere on slog.
That said, I don’t think your constitutional scholarship is such that you can make that claim about what is and is not allowed.
@ 37, look at Texas to see what happens when Republicans are put in full control for a decade or two.
Sure, why not? It worked so well for the schizophrenic, dystopian future America in Snow Crash.
@37,
When in the past have republicans cleaned up messes created by liberals?
There are certain things that should never be privatized and infrastructure is one of them. If we allow our highway system to become privatized, it will end up being just another business, the people will get screwed every way they can. Maintenance will be even more of a nightmare than it is now since I highly doubt a private owner will actually be willing to spend what it really takes, unless it means lawsuit.
“So this idea would eliminate jobs. “
Thanks for admitting the state wastes money so there really is no need to raise WA state taxes if, as you claim, 1/3 of state workers are waste.
The GOP’s “solution” to cleaning up ANY mess is simply to pile a bigger mess on top of it.
Selling off some of the gold in Fort Knox sounds like a good idea, since the price is so high right now. Helping to bring down the price of the stuff would benefit people who need to use it for industrial purposes, too.
“When in the past have republicans cleaned up messes created by liberals?”
Vietnam?
Chicagos recent experience with privatizing their parking meters is instructive.
The massive privatization efforts that form the heart of Reaganite and Thatcherite economic policies provide a quick influx of money into the government and stimulates private industry, but its long-term benefits are spotty at best. We need finally to recognize that good things cost money; we cannot have perfect roads, excellent health care, and terrific education WITHOUT PAYING FOR THEM. Some of those things can be done by private industry, but we must recognize that a) we must include in the cost the profit that such a model of business demands, and b) control over those services will no longer be democratic. I am not always and everywhere opposed to privatization; but some one needs to show me how government waste or mismanagement is more costly than the venues of profit and undemocratic private ownership. Also, while I don’t necessarily like the fact that a lot of freight moves by truck, there is no one (unless you grow your own food, make your own furniture, etc.) that does not “use” the interstate highway. Those kiwis, and the refrigerator that keeps them fresh, most likely did not come into being in your town.
@46,
Hmmm… Eisenhower created things by sending advisors there first. The democratically controlled congress in 74 were the ones who voted to cut off funding which basically led to the end of U.S. involvement…
I wouldn’t go so fart as to say Vietnam was a republican mess cleaned up by liberals, but it also wasn’t a liberal mess cleaned up by republicans either.
As the poster at 27 points out, a public/private contract isn’t necessarily the end of the road. (Sorry, couldn’t resist.)
Italy has major through routes privately operated and tolled, and I’ve yet to complain about maintanance or closed roads in my time there. And I absolutely can’t say the same about the mass transit systems plagued by frequent and pointless strikes.
Nor are low traffic areas underserved. Those areas remain in the control of various levels of government, while the potentially profitable main routes are partly privatized. The road to our village, which may have 10 residents even owning cars and visits from family once or twice a month to the remaining 40 or 50 full time residents, is maintained, and it doesn’t even show up on road maps.
Granted, the system is somewhat expensive from an American perspective. For me to go from Rome to Lunigiana, about the distance from Seattle to Yakima, costs around $25 or $30 in tolls, plus the not inconsiderable expenses of fuel, maintanance and insurance. This should delight liberals though, since it would undoubtedly curb private car use to some extent.
I don’t know the comparitive costs between private and public, so don’t advocate either. But those haven’t been the concerns raised here by and large.
I think Chicago’s highway system, which has fallen into 3rd world levels of disrepair, is a perfect example of why the private sector should never run major infrastructure. The taxpayers built the roads, the rights were auctioned off at a tiny fraction of the price of building the roads, those roads were left to crumble for 40 years, and now that replacement costs are unavoidable for the private ‘owners’ the tolls are going through the roof. And when they do repair work, it is of a substandard quality and done on a very slow timeline (see the Dan Ryan Expressway rebuild).
I would say that private tolling is fine, but only for roads that need repair…make the companies that want them pony up the dough for major repairs at the outset-
@51
That’s a function of privatization done poorly. The residents of Chicago benefited from tolls that didn’t accurately express the costs of maintanance, and now have to pay the piper.
It’s like living in a condo whose board doesn’t levy enough in dues for maintanance. When the 4 or 6 million dollar repair comes up caused by deferred maintanance everyone hollers, but no-one asked the board to raise dues when it would have done any good. Indeed, had they raised the HOA dues everyone would have screamed bloody murder and voted them out.
Generally this is what liberals want. They want good transportation infrastructure, education, defense (though only when they’re threatened) and so on. And they want the top few percent to pay for it all.
It doesn’t work that way. My taxes are part of the expense of running my business. I don’t sigh deeply, stroke a check to my demanding Uncle Sam and go on. I build those costs into the final price of the product I sell. So does GE or Safeway or any other business. The only difference is that smaller businesses can do this less, since they’re more directly answerable to their customers. High taxation benefits the very corporate businesses liberals hate so much.
In the end, if you want a cradle to grave nanny state mitigating your bad decisions in life, you will pay for it directly in taxes or indirectly in cost of living.