A New Budget Solution

Republicans, who say they want to reduce spending, have long argued with Democrats, who say they must raise taxes, about which of these two politically unpleasant alternatives should be used to reduce the deficit. But those are not the only two choices.

The government could raise some $300 billion—compared to a 1987 federal budget deficit of around $175 billion—by selling off selected assets and enterprises, concludes the recently issued report of the Privatization Task Force, coordinated by the Reason Foundation. In addition to providing an overview of privatization, the report includes chapters on 10 specific federal programs or assets that could be turned over to the private sector.

The asset sales would not simply provide a short-term remedy. They would reduce budget problems long into the future by reducing interest costs on the federal debt, eliminating future taxpayer subsidies, and creating taxable private businesses.

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