There have been claims that the United States President, Donald Trump is trying to privatize some major economic programs in his country. Medicare, college loans and infrastructure projects are sectors to be privatized. The main aim is to save money and increase efficiency. Trump’s government believes this method will improve the country’s economy.
Privatization takes place in two forms: through withdrawal of the government from management of public companies, by outright sale of public sector companies. The United States president did not disclose major policies while campaigning for the state seat. Benefits the United States government will accrue from privatization is increase in efficiency, lack of political interference, short term view and increased competition.
According to Trump’s policies, medicare program needs to give the seniors and disabled people priority in terms of offering tax. This will allow the aged people to purchase private health insurance. Give them voucher to enable the purchase of insurance funds to be used during emergency. With the health insurance, old people can be treated faster without incurring cost more sore when there is lack of funds. It reduces the burden of paying large sum of money especially to those having critical problems like kidney failure. Patients suffering from kidney failure require annual dialysis failure to, leads in chronic problems. Privatizing medicare by making sure old people get private health insurance will improve patient’s life hence increase health care.
College loans offered to students will be moved to non-governmental organizations just as it was before. These banks will be in charge of lending money to students to boost the market and create enough profit. The private banks have a profit incentive to cut cost and increase efficiency as compared to state banks. Shareholders give workers pressure to perform and work diligently, this is not the case with state corporations. Government companies fear losing workers because of maintaining public view, to them, public opinion matters.
Construction of roads and bridges project will feed in more money through revenues if handled by private sectors. These corporations have to invest their money to construct roads and improve the transport system. In return, the government will equalize tax incentives to investment cost to enable them benefit from the task. If more dollars are injected to cater for all the cost, more people will venture their time into it. This program can succeed because non-state corporations aim at increasing profit by working efficiently. Although the programs are meant to improve a county’s economy, United States will face challenges like natural monopoly, public interest or troubles of regulating private monopolies.
Countries like Europe tried privatizing its postal services, this led to severe job loss by workers. If president Trump proceeds with these plans, the country must be ready to face any challenges brought by privatization. The planning team should set effective measures to ensure this plan is a success. Before proceeding with their plans, they should consider the type of industry involved and quality of regulation. Industry matters in terms of how they raise incentives of profit.
Regulation depends on certain standards to be met to maintain low prices. The United States could improve drastically if good measures are put in place during privatization of above mentioned programs. Trump policies consider key sectors that bridge enough profit to the economy. Arguments towards and against privatization should be considered while making final decision about these claims. Above all we should consider both the pros of privatization, weigh them before taking major risks. Investment is all about taking chances or being a team player.