Posts tagged ‘Privatization’


Military Privatization Led to Great Waste

The Commission on Wartime Contracting concluded that at least 31 billion, and possibly as much as 60 billion appropriated by Congress for the American wars in Iraq and Afghanistan, over the past 10 years, was lost to contract waste, fraud, and abuse.

Unlike previous conflicts, where the U.S. used uniformed military units, with strict chains of command, and established budgetary procedures, President George W. Bush instead employed independent contractors to privatize operations in the field, resulting in massive cost-control failures. He avoided expanding the armed forces, because a draft would have been needed to fill their ranks, which would have turned Americans against his wars.

Now, the U.S. wastes billions on private security companies in situations where military personnel could have been used. Contractors now represent more than half of the U.S. presence in Iraq and Afghanistan. The number of contract employees used by the Defense Dept., State Dept., and U.S. Agency for International Development (USAID) exceeds 260,000. 46,000 Americans and 214,000 Iraqi and Afghan nationals are employed. In some areas, independent contractors outnumber the U.S. troops in the field.

The basic problem with the use of so many private contractors is mismanagement. As the number of contractors increased, but the size of the agencies charged with overseeing them remained flat, the ability to manage budgets deteriorated. Government agencies simply lack the staff to manage the greater number of contractors.

It does not take a rocket scientist to know that private contractors are going to soak the government for every dollar they can take, and someone needs to stop them from ripping us off. The problem is the profit motive is not being offset by taxpayer watchdogs. In the rush to war, there was a lack of competitive bidding, and once contracts were awarded, it was just too easy to renew them.

Much of the waste, fraud, and abuse, stems from contractors doing too much. There was poor planning before Bush started his wars, and the U.S. did not understand the needs of the host countries, or their long-term development goals. Many projects were ill-conceived, and are now abandoned, or not maintained.

The Commission reported: “poor planning, management, and oversight of contracts, led to massive waste.” They recommend a phase out of the private contractors. It is time to dismember Bush’s Contractor Army. It is simply too expensive as compared to the military, whose soldiers and Marines have fixed pay grades.


Prisons: The Wrong Place to Privatize

The U.S. Supreme Court (5-4) recently upheld a California Federal District Court ruling that ordered a reduction in the state’s prison population from 156,000 to 126,000, because the conditions were so overcrowded and bad, they violated the Eighth Amendment ban against Cruel and Unusual Punishment.

Although the California-owned prison facilities were designed to hold a maximum of 80,000 prisoners, the state system was operating at about 200% of capacity. In some situations, up to 54 prisoners shared a single toilet. Prisoners were also being denied minimal health care, as medical conditions were untreated, or ignored, and suicidal inmates were held in cage-like booths.

While conditions in California’s facilities were unnecessarily cruel, they were probably not unusual. Throughout the country, other states also have overcrowded substandard conditions.

Most lawyers would agree it is not easy to sue a state government, and it is even more difficult once state functions have been privatized. Unfortunately, the trend towards privatization has been growing. The Republican-controlled Florida legislature recently reduced the State Dept. of Corrections staff by 1,751 workers, and voted to privatize even more of their state prisons.

The worst problem with privatization is the Bill of Rights was created as a check against the conduct of the government. It was not written to control the behavior of private sector actors. Right-wing judges interpret the 8th Amendment ban against Cruel and Unusual Punishment as applicable only to the government.

If the California prison situation had been operated by private contractors, the prisoners’ case would have been much more difficult, since the defense attorneys would have argued the 8th Amendment simply did not apply.

Some government functions should never be privatized. Prisons are one of them. Anyone in the custody of the state must be treated humanely, but there is no guarantee of such treatment, once the state is not involved. States should not delegate the job of incarceration to private sector profiteers, as they would certainly cut financial corners even more than states like California.


S.S. Retirement: Don’t Even Touch It

The right-wingers are once again talking about tampering with the Social Security Retirement System and they need to be stopped.

It is very troubling to hear politicians and media pundits discuss all forms of Social Security, in the same breadth, as if they were all the same. Since the programs are as different as night and day, the words used to describe them must be clear. Medicare, Medicaid and SS Disability have legitimate issues that need correction, but the retirement plan does not. So there is no confusion or ambiguity, everyone should use the word retirement when discussing what the elderly receive when they stop working.

Social Security retirement, created in 1935, works pretty well, and needs no major adjustment, or privatization. With every paycheck, .0765 is deducted and paid to the government. Of that sum, .062 is applied to the Old-Age Trust Fund, and 0.145 is paid to Medicare. Employers are required to make matching payments.

Social Security retirement works, because it is universal and mandatory. The deal is, throughout our work lives, we all pay into the system, and we all receive benefits when we stop working. It’s simple to understand and easy to administer. If you retire early at age 62, your monthly benefits are reduced for the rest of your life. If you wait for full retirement at age 65 or 66, you receive the normal sum. Your benefits are based on your average earnings.

I dug out my old W-2s from over the years and added up all of my personal contributions to the retirement trust fund. I then doubled them to account for the matching employer contributions. I then divided that sum by the estimated monthly payment Social Security has told me I will probably receive upon retirement. The bottom line is there is roughly enough money in the trust fund, from principle alone, to cover payments through life expectancy.

The very idea of privatization is foolish and reckless. If the program was privatized, and the money was placed in the hands of private sector funds, there is no guarantee sound investments would be made, or that the money would not be lost. The recent Great Recession of 2008 is a perfect example of how the stock market can take a dive.

The reason we need to maintain a mandatory government-run retirement trust fund, is that many Americans earn so little, they are unable to save for their golden years. If the deductions were not mandatory, those on the margin, which is about half the population, would spend all of their paychecks as soon as they were received. They would not be able to build up any savings on their own, because they have so little discretionary income.

Since most people are also living longer now, they cannot continue working, until they die. Modern American medicine is keeping men alive for 75.6 years, and women for 80.8 years. Most stop working as they turn 62 or 65, because they are simply physically or mentally unfit to continue. With no income, most absolutely need their SS retirement benefits to survive.

When it comes to the retirement system, I just don’t see a serious problem. The next time a right-wing politician tries to scare you by saying the money you paid into the Old-Age Trust Fund is not there, ask him for the names of those who stole it, because they need to be prosecuted for theft. Ask for the names of the irresponsible politicians who voted to take the country to war, but lacked the courage and responsibility to raise taxes to pay for it. If they think they can cover the cost of their wars with our trust for retirement, they should be warned: Don’t even think about it!