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When government funding is cut, public institutions (city, county, state, and federal) will be at risk of failure, leaving them open to private "investors" in order to keep agencies running. Of course, some agencies, especially those that serve a regulatory function, will undoubtedly become ineffective. This weakening of regulatory power will serve big industry profits rather than protect the People. Other necessary agencies/institutions, such as schools, police, fire, water, transportation, pension funds, etc. that fall into private hands will become profit driven and expensive to all. Tax dollars will flow to investors. It is the ultimate gravy train. Safety and/or performance standards usually fall as corner cutting in order to capture more profit is always the objective, not service and/or protection to the People.
Of course, privatization usually leads to lower wages, as it's all about cost cutting to gain more profit. Lower paid workers leads to reduction in money circulating within a community. Local businesses suffer as less money flows to them, and layoffs lead to further deterioration of local spending. Many businesses, usually small and medium sized, will go under making it all the more profitable for the large multi-nationals. Multi-nationals are the official Republican base, in case that wasn't already clear. Less competition is always a good thing for these behemoths. Some folks naively believe that multi-nationals want us to make more money so that we can purchase their goods, but this is false assumption. If a large company is present in countries outside of the U.S., they are raking in the profits since there are far more customers with disposable incomes elsewhere, especially in China & India. Of course, these multi-nationals make plenty of money off of us, too, but depressed employee wages, low regulations, and little to no competition are the keys to their success. Sucks for the American People, though.
Government investments in high tech projects to keep us employed and competitive with demand from other countries will likely be reduced or cut altogether, leaving us more economically devastated and increasingly irrelevant compared to more progressive economies around the world. Good news for the Republicans, since their only shot on taking complete control in 2012 will be a shitty economy. The Republican party (AKA The Multinationals) would benefit greatly as the woefully misinformed, economically insecure peeps will be less motivated to vote or they will vote for the very party that is hell bent on destroying our economy, thanks to multi-national controlled media and think tanks' successful campaign to pin blame on the Dems & foster disenchantment in the Liberal base. Once the Repubs gain more power, the Bush Era economic gutting will resume full speed ahead.
Simplistic, I know. There's a lot more, but you get where I'm going.
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