Don’t Miss the Chance to Privatize

According to this Forbes piece, President Obama proposed privatizing the Tennessee Valley Authority (TVA) in his budget, but Republicans from Tennessee are opposed using the very same arguments that democrats used to oppose privatizing the Bonneville Power Administration (BPA), when President Bush proposed privatizing it.

First, I want to point out that politics is politics. In the comments of this post from February, Wally and I discussed the BPA, an electric power provider in the Northwest structured like the TVA as a Federal government stepchild.

It isn’t a fluke that President W proposed privatizing the BPA, while Obama proposed to privatize the TVA. The BPA provides power primarily to states that tend to vote for Democrats, while the TVA does the same in states that tend to vote for Republicans. Might as well take government goodies from your opponents first.

Plus, it doesn’t hurt to get your opponents in Congress spun up on keeping their government goodies so you can claim they are not cooperating with making budget cuts.

But, if I were a Republican I’d put privatizing the TVA on a fast track and call President Obama’s bluff.

It would make a great test case that Republicans could use to demonstrate privatization can happen without calamity. Successful test cases make good sales material. If it works out well, it just might touch off the willingness for more privatizations, including things like the BPA in the Northwest and the TSA.

3 thoughts on “Don’t Miss the Chance to Privatize

  1. That’s amusing. How many (if any) out of area (not served by the TVA) Democrats have rallied to defend the TVA, I wonder? How many (if any) out of area Republicans has rallied behind Obama’s proposal?

    If the TVA is self-financing and only receives government backed loans, how does privatizing it save any money in the federal budget?

    • The Forbes article mentioned two Republicans out Tennessee that have publicly stated they opposed it. I don’t think the issue has risen to be big enough yet to draw comments from others. Why go out on a limb?

      Selling a self-financing (i.e. profitable) asset raises cash that can be used to retire debt, something the US Gov’t has plenty of, taking the burden of retiring that debt off the taxpayer and reducing the interest taxpayers pay to service the debt.


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