Private companies still can’t do what the Gov does any cheaper or better.

[DrPizza]

THey don't count future costs. Only current costs. That's how they game the system.

Making things up so that the "facts" can fit your version of reality? Read the article.

 

[PokerGuy]

It's not a matter of public vs private that creates the savings. It's the matter of competition -- or lack thereof. If there is real competition, it will drive down the cost and drive up efficiency. If there's not, then private is no better than public (it could be worse).

The real key is competition. Since the government has no competition, it's always bloated an inefficient... but if you give a private company a situation with no effective competition, guess what, they will be just as bloated and inefficient.

 

[Patranus]

There was an article a while back about how privatizing ambulance services from the city (many have them incorporated with fire) cut the operating cost in 1/2.

The fact of the matter is that even if the government *can* do it for less, without *choice and competition* from the private sector there is no reason for its operations to be optimized.

Just look at public schools. Charter schools are destroying the public school system (in a good way) because it provides *choice* to parents creating *competition* against the publics schools and they simply cannot compete.

9 times out of 10 the government cannot compete with the private sector when there is true competition. The OP sounds like the private sector isn't allowed to compete because the facilities must be run like state facilities. Let the private prisons run how they want to run and we will see what happens to cost.

 

[senseamp]

There was an article a while back about how privatizing ambulance services from the city (many have them incorporated with fire) cut the operating cost in 1/2.

The fact of the matter is that even if the government *can* do it for less, without *choice and competition* from the private sector there is no reason for its operations to be optimized.

Just look at public schools. Charter schools are destroying the public school system (in a good way) because it provides *choice* to parents creating *competition* against the publics schools and they simply cannot compete.

9 times out of 10 the government cannot compete with the private sector when there is true competition. The OP sounds like the private sector isn't allowed to compete because the facilities must be run like state facilities. Let the private prisons run how they want to run and we will see what happens to cost.

Yeah, private sector is going to optimize out its profits, any time now. Just like health insurance companies are doing
They are responsible to their shareholders, so they are optimizing UP the amount they charge the government.

 

[Vette73]

It's not a matter of public vs private that creates the savings. It's the matter of competition -- or lack thereof. If there is real competition, it will drive down the cost and drive up efficiency. If there's not, then private is no better than public (it could be worse).

The real key is competition. Since the government has no competition, it's always bloated an inefficient... but if you give a private company a situation with no effective competition, guess what, they will be just as bloated and inefficient.

RTFA there are at least 8 differant private prisons in AZ, yet the state was equal to or lowwer cost even when they had to house the more costly prisioners.

 

[uclaLabrat]

RTFA

"According to Arizona officials, the data account for costs as varied as guards’ pensions and inmate food."


Even adding in pensions the State still matchs or comes out better.

It won't work. Conservatives have been chanting the mantra of "if government does it, it HAS to be more inefficient than a private entity!". They've done it so long, it's gospel, despite any evidence to the contrary, and refuse to accept it may be possible for a well managed government program to be better.

 

[BoberFett]

It's not a matter of public vs private that creates the savings. It's the matter of competition -- or lack thereof. If there is real competition, it will drive down the cost and drive up efficiency. If there's not, then private is no better than public (it could be worse).

The real key is competition. Since the government has no competition, it's always bloated an inefficient... but if you give a private company a situation with no effective competition, guess what, they will be just as bloated and inefficient.

This.

Beyond this, I'd prefer to see the government contract things out far less. If the government has been tasked with something, it should it provide the service as much as possible. I'd rather see a government with far fewer tasks that it's supposed to do, and doing those few thing well without contracting them out. Our public/private hybrid seems to be the worst mess of corruption and graft possible. Prisons are a good example.

 

[PokerGuy]

RTFA there are at least 8 differant private prisons in AZ, yet the state was equal to or lowwer cost even when they had to house the more costly prisioners.

Is the fact that there are 8 private prisons in AZ automatically evidence of effective competition? There are probably 40 broadband providers in the US, yet I have exactly 1 option. In other words, there is no effective competition, no matter how many companies are involved. Is there real competition in AZ for these contracts? I don't know, but it's highly unlikely.

Also, if you have a private company do something, then impose a ton of regulations on it such that it can only do it the same way as the government can, then of course there's no cost benefit from privatization. Again, I don't know if that's the case here, but that's usually how it goes.

 

[senseamp]

There is always going to be an excuse from the privatization apologists for why their utopian ideas don't work in the real world.

 

[Vette73]

Is the fact that there are 8 private prisons in AZ automatically evidence of effective competition? There are probably 40 broadband providers in the US, yet I have exactly 1 option. In other words, there is no effective competition, no matter how many companies are involved. Is there real competition in AZ for these contracts? I don't know, but it's highly unlikely.

Also, if you have a private company do something, then impose a ton of regulations on it such that it can only do it the same way as the government can, then of course there's no cost benefit from privatization. Again, I don't know if that's the case here, but that's usually how it goes.

FACEPALM

You have 1 option for your case not 40, the STATE of AZ has at least 9 options, 8 private and 1 theirs, for prisons.

 

[Macamus Prime]

We should go the way of Spain or Greece....oh, wait.....

You are right - it's better to allow profit to get in the way of serving the public.

Cops INC won't arrest certain criminals, because they cost too much. So, you end up getting stabbed in the face because John M. Cockinworth III wants to hit a 20% profit increase for 2Q11, and has ordered all his employee do not arrest unhinged maniacs.

 

[PokerGuy]

FACEPALM

You have 1 option for your case not 40, the STATE of AZ has at least 9 options, 8 private and 1 theirs, for prisons.

And in your extensive expertise of AZ contracts and it's prison system, you've reviewed exactly how that process works and exactly how effective the competition is, right? Oh wait, you haven't. Neither have I.

Effective competition is the key. That's what creates savings. Private or public doesn't mean a hill of beans.

 

[PokerGuy]

You are right - it's better to allow profit to get in the way of serving the public.

Straw-man fail.

I just don't get why lefties seem to have such a hangup with the concept of profit.

 

[Macamus Prime]

Straw-man fail.

I just don't get why lefties seem to have such a hangup with the concept of profit.

You are right, all these stories of people being denied healthcare and denied a quality return on what they paid for, are not true. In fact, it's probably the lefties that are setting people up to get fucked over by greedy companies.

Like Enron. Lefties orchastrated that entire mess.

Healthcare putting profits before actually doing what they are paid for; lefties.

Allowing poisons into our building materials and e-coli onto foods that have never had such problems; lefties.

You can't be this fucking bli,... oh, wait - it looks like you are. Carry on.

 

[werepossum]

No surpise. Private companies have the same requirements as state run facilities plus they must generate a profit for the owners. Simply economics will tell you that the private model will cost more for the same level of service. And as Macamus points out the same is true for Healthcare

Under that "logic" there is no business that could not be better run by government. So are you claiming the most prosperous nation in the world is North Korea, or Cuba?

Well that depends on whether you have to pre-fund pension requirements, which is 100% true in Canada (even for public plans), and I believe is true in the US as well.

If you do, then you are counting future costs.

That's arguable. There's pretty widespread agreement that government pensions are severely underfunded. (I say arguable because private sector pensions are also thought to be underfunded, if not by as much.)

 

[actuarial]

That's arguable. There's pretty widespread agreement that government pensions are severely underfunded. (I say arguable because private sector pensions are also thought to be underfunded, if not by as much.)

I don't think there's a widespread agreement on public sector funding at all.

Certainly over the last few years almost any plan has been underfunded. Just like it was hard to have any portfolio that had any kind of decent 10 year return. A lot of that had to do with end date bias.

Things are already starting to get much better on their own. But in the public sector, especially in the US, there's a lot of games that are played with pension funds. Things like funding the plan with government treasuries. Whether that trickles down to the accounting side in analysis like this is another question. That's not to say that they aren't recognizing the costs in full either.

 

[Throckmorton]

Under that "logic" there is no business that could not be better run by government. So are you claiming the most prosperous nation in the world is North Korea, or Cuba?


That's arguable. There's pretty widespread agreement that government pensions are severely underfunded. (I say arguable because private sector pensions are also thought to be underfunded, if not by as much.)

What does prosperity have to do with anything? The prison companies are very prosperous. Private insurance companies are very prosperous.

When the public is paying for a service, there is no reason to waste a big chunk of that on tax money profits for some private corporation...

 

[PokerGuy]

No surpise. Private companies have the same requirements as state run facilities plus they must generate a profit for the owners. Simply economics will tell you that the private model will cost more for the same level of service.

You're looking at one part of the picture (requirements) while ignoring the other: pressure to become efficient and reduce expenses. A business with competition is under constant pressure to do better, become more efficient, come up with better products. If they don't they lose money and go out of business. Government on the other hand has no such pressure. That means government will usually be much less efficient. Doesn't mean everything should be privatized, but you can't just look at one side of the picture and not the other.

 

[ElFenix]

If we executed more inmates rather than incarcerating them we could save a lot of money.

completely false unless you're advocating summary executions like china.

 

[Throckmorton]

You're looking at one part of the picture (requirements) while ignoring the other: pressure to become efficient and reduce expenses. A business with competition is under constant pressure to do better, become more efficient, come up with better products. If they don't they lose money and go out of business. Government on the other hand has no such pressure. That means government will usually be much less efficient. Doesn't mean everything should be privatized, but you can't just look at one side of the picture and not the other.

So if prisoners experience a worse product due to the drive to maximize profits they'll take their business elsewhere on the free market?

 

[oznerol]

Just a random question - and correct me if I'm wrong - but the article doesn't mention anything about quality - only costs, no?

And as for cost - I'm a bit unclear. Is the study suggesting the cost to operate the private prisons is the same or more, or the cost to the government to contract out the prison is the same or more than running it itself?

Edit: Scratch that 2nd question - it's in the first paragraph of the article, duh. Anyway, isn't the cost/terms of the government contract more relevant than the operational costs?

 

[PokerGuy]

So if prisoners experience a worse product due to the drive to maximize profits they'll take their business elsewhere on the free market?

You're confused about who the consumer is in that example. The consumer is not the prisoners, it's the taxpaying public footing the bill. As long as the prison is run according to the requirements set forth by the government for prisons, the question is which method is most cost effective.

I'm not really a big fan of privatizing police or prisons, unless there's a very substantial savings for the taxpayer, and even then I'm wary of the concept.

 

[ichy]

completely false unless you're advocating summary executions like china.

http://en.wikipedia.org/wiki/Leon_Frank_Czolgosz

This is the most prominent example I can think of. Leon Czolgosz was electrocuted two months after he shot president McKinley, and that was after he had a fair trial where he was proven guilty. That's the way our legal system SHOULD work today, and if it did then capital punishment could save us huge amounts of money.

 

[Throckmorton]

You're confused about who the consumer is in that example. The consumer is not the prisoners, it's the taxpaying public footing the bill. As long as the prison is run according to the requirements set forth by the government for prisons, the question is which method is most cost effective.

I'm not really a big fan of privatizing police or prisons, unless there's a very substantial savings for the taxpayer, and even then I'm wary of the concept.

They're both customers, and the taxpayers can't just go to a different service provider either.

 

[ElFenix]

http://en.wikipedia.org/wiki/Leon_Frank_Czolgosz

This is the most prominent example I can think of. Leon Czolgosz was electrocuted two months after he shot president McKinley, and that was after he had a fair trial where he was proven guilty. That's the way our legal system SHOULD work today, and if it did then capital punishment could save us huge amounts of money.

considering the vast majority of people incarcerated were not convicted of capital crimes, even if all capital crimes went immediately to the death penalty we'd still not be saving much.