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The concept of outsourcing government services never made sense to me. Ostensibly it's to reduce costs, but the company has a vested interest in lobbying for as much funding as possible, and delivering as little service as possible. Without a huge amount of oversight we can't have a system like that. Which means we have to pay for a bureaucracy and to fund the program.
That being said, we can eliminate a lot of cost and resentment of social programs by making them universal. There's a reason Social Security is a third rail: Everybody gets it, so everybody has a stake in preserving it.
Government does not exist to make a profit. Private companies do. Outsourcing services to a private company cannot save money in the long run. Instead of paying for just the costs to administer and provide the service, we, the taxpayers, now need to pay both of those costs plus a percentage more that the company needs to make to stay in business.
The idea that competition in the private sector will somehow breed innovation and efficiency is a lie.
My opinion is that the true gain of outsourcing is that the private company can cut corners until it gets caught. Then it can change it's name and bid for the same job. So it can in fact be much more efficient, just at the cost of quality.
It also gives poloticians a way to trade favors with each other. Politician A gets a donation from the private company. So Politician B helps that company win the bid. In return A votes for Bs bill. Without that, how would any bill ever get passed.
With a government that had ample bidders and that made sure that there's good requirements for the bids, made sure they're followed through and whatnot could get away with outsourcing stuff. And hell, it might be more efficient in some cases. But often it just falls flat in some regard. Often with the service ending up more costly and shittier to the citizen than the government service.
Even in an ideal situation you'd need a government agency to oversee the bidding process, and to monitor the services to ensure they're effective. I just don't see how that ends up saving money, especially when the company has to also make a profit.
Plus, there's some things government handles that shouldn't ever have a profit motive. And ideal society would have zero prisons, but there's an entire prison industry in the US that has a vested interest in growing the prison population.
If we're talking about a big operation then the bidding savings can be dwarfed by the cost of overseeing the project. Not to mention the government needs to oversee its own work too, to make sure an acceptable result.