Advantages of privatization. Can you refute this?

Question

A comparison of government controlled charity (welfare) and private charity. With example of $100

government:
1. cost of IRS to enforce tax collection, cost of federal prisons, courts, buraucracy, re-election funds, etc, recipient gets tiny fraction of $100
2. recipient gets cash: can buy beer, cigarettes, drugs, candy, etc, rampant fraud
3. no choice, when money is wasted / lost I still pay taxes next month
4. my car broke but I must pay taxes so I'm forced into debt

private (i.e. church, salvation army, etc):
1. low or no administrative cost, recipient gets full $100
2. recipient gets food or medicine, not cash, virtually no fraud
3. choice: Red Cross wasted $100, so next month I give to United Way instead
4. my car broke so I keep my $100 this month, make it up later, not forced into debt.

These are just a couple quick points that prove privatization is the only logical method to help the needy. We must help the needy, but not through the government. Can you refute?

I do not assume that EVERY person will give to charity. I believe people deserve the ability to make that choice for themselves.

Using the government assumes that people are evil and heatless and will not give to charity. Based on this assumption, the "solution" is to FORCE all people to give to charity (taxes).

One assumption leads to freedom, one leads to oppression. I would rather make the assumption that leads to freedom.

Answer 1

Yes, I can refute. Not so much to defend the socialist way of doing things, which is as wasteful as you said it is, as to dispel your illusions that private disbursal of charity will be any better once the really big money starts coming into the hands of non-government charity organizations.

At present the character of NGO charity is decentralized. That would change as big money, enough money to make government assistance obsolete, began coming in. Separate charity organizations would merger and become one, just as has happened with banking firms and telecommunications companies.

At each consolidation, proponents of the merger will (correctly) say that the merger will increase efficiency. But in the end, you'll have created the sort of corporate monster that likes to shovel efficiency gains into the pockets of stockholders and senior executives. The ultimate result would be no better than the socialist system we have now.

Answer 2

So what you're trying to prove is that the government shouldn't dole out welfare and instead, private agencies should feed and cloth the poor? Some of your points don't make sense at all, so here's my refute, as you asked for:

1. Monies used to support welfare programs don't come directly from the IRS at all. IRS *collects* taxes to fund everything that the government wants to spend money on. A state or federal program is funded through the legislature that decides how much money to give the program based on what all the other approved items in the budget. If the government isn't going to get enough money from taxes, welfare is usually the first thing to get eliminated.
2. Recipients do not get cash - they get foods stamps and housing vouchers. They cannot buy beer and cigarettes.
3. When money is wasted in welfare fraud, it does not impact your taxes. When was the last time your taxes were raised? Certainly never to specifically fund welfare!
4. Whether you go into debt has no bearing on your taxes, just your income and your ability to stick to a budget. Are you saying that if government-funded welfare were eliminated, you'd pay that much less in taxes? I don't think so!

Private charitable organizations have huge overhead and administrative costs, so there is no way $100 donated = $100 to the recipient. There is plenty of fraud and waste - the Red Cross was found to have squandered plenty of money donated for Katrina relief and the United Way president was discovered to have used their money for limos and hookers back in the 80s.

So bottom line, don't blame welfare programs for your own inability to balance your budget. There are so few of these programs left, believe me, not that much of our taxes dollars are spent on poor people that it would make a difference in your lifestyle. Why don't you ask the government to stop funding huge mistakes like the war in Iraq instead? That's where the real fraud and waste is!

Answer 3

For private charity to fail to outdo the Government, it would need a rate of 1%. Private organizations always do better than government because government just can't make economic calculations, especially when it can just forcefully extract every penny it wants.

The Soviet Union failed because they tried to run their whole economy from the government. The bureaucrats would have parts shipped from miles away when the same parts were made across the street, wasting resources. Since they paid everybody the same amount of money, those who were smart just did enough work to make it appear that they were working and productivity dropped.

Its irrefutable that governments fail whenever they attempt to manage the economy. The great economist Ludwig von Mises recognized that back in the 1920s and predicted the failure of the Soviet Union. FDR, by following the now discredited Keynesianism lengthened the Great Depression. The world's 2 most populous nations, India and China, by following Socialism, have very weak economies and that's despite India's adoption of a democratic government (which proves that Capitalism is the basis of economic strength, not Democracy).

By replacing handouts with charity, people will have more so-called "Positive Rights." Well, actually, leftists are much less likely to give to charity than Capitalists, which shows that they aren't as generous as they're thought to be, except when it comes to spending other people's money.

I guarantee that no private charity would purchase New Orleans Saints season tickets for a Katrina victim (who may not have been an actual Katrina victim by the way), as FEMA did.

Answer 4

I would use the example of Enron Corp. Privatize the power utilities, now how did that work. I could go on but the idea you suggest has problems. The big business solutions give huge bonus to administrators. The amount of fraud you talk about gives more money to a person than they could ever use. Give the poor slob a beer and a cigarette, or give the executive another sixteen million for a year end bonus. Charity is your choice and you should choose wisely. Taxes you must pay mean that you made money and you made choices that made you run short.

Answer 5

Seventy-five percent of the private charities use a service to collect their money, and they take a healthy cut off the top. The Red Cross has been rampant with corruption and incompetence, pay particular attention when politicians apply for charity jobs, this is part of their problem. The faith-based initiatives are also a scam, just another vehicle for politicians to steer money to the charities of their faith and thereby garner votes, hardly the American Way, or is it. Last time I checked, not one non-Christian org. had benefited from the faith-based initiatives. The point of having government do charity work is to have controls to stop corruption and stealing and to distribute the money fairly, and in the most effective way to benefit everyone. The problem with that is government incompetence and bureaucracy. I would still vote for government controls over private charities.

Answer 6

Privatization doesn't work under market imperfections...private sector entities run under a market system driven by profit as a motive. Market imperfections are areas of the marketplace where profit would be difficult to obtain...example rural utilities: Providing electric, telephone, natural gas would not be profitable due conditions that rural residence are sparsely populated and live great distances from each other. So a private firm would obtain little if any profit for the length of wire or pipe to provide and maintain service to those areas. No profit means...no services unless some form government mandate, subsidies or actual government department providing the service without a profit motive was in place. Just something more to think about.

Answer 7

The problem isn't THAT the government controls this happening, it's HOW the government controls this happening. The government could deliver non-monetary food and clothing aid if it chose. The problem is one of accountability, if you are giving resources to provide for the needy, you need to be accountable for those resources being used properly.

Your argument that a church, the salvation army, etc... are the only organizations capable of doing this does not hold up, the government could model their system after theirs and get similar results.

Answer 8

NHS is being stalked with the help of the yank companies who're parasites in the u . s . a . and desire to take over our uk- NHS, which become doing properly until eventually the Tory government under the evil Margaret Thatcher cut back it up into slices so as that it may be bought off and the charlatan Tony Blair carried on with the destruction and now we are decrease back with the hateful Tories as quickly as lower back to proceed the dissolution of our NHS. the subject is that super Britain has rubbish Politicians who desire to bounce on the comparable international point by using fact the human beings do. it incredibly is a costly and pointless exercising and we could continually withdraw from all theatres of conflict and end finding out to purchase palms, planes and rockets from the u . s . a .. we've already accomplished our bit to hold directly to democracy. American human beings could be in a state of revolt.

Answer 9

I can't refute it, but I also think that both can go hand-in-hand for different situations. I would see student loans and public education as perfect examples of something the private sector is limited in. Also, with religious groups, some creeds may not be able to offer for various reasons different services. Government can assist in that regard. Otherwise, interesting points!

Answer 10

Salvation Army sucks ***. Volunteers pick over donations for their own use. Kettle ringers consistently rob the kettle and skim off what they can. Yet I needed some help with food and they begrudged me a bag of food because I had recently gone to another food pantry. No fraud you say? Bullshit.