The Failure of Privatization

Ronald Reagan first tried selling federal assets to the private sector or to state governments in 1982. Dubbed “the New Federalism,” its purpose was to save $9 billion over three years by shedding such Federal Government assets and services as surplus national forest land and weather satellites.

The program bombed. Massive bipartisan opposition in Congress, fanned by interest groups who feared adverse consequences, prevented many of the sales, and those that did take place netted the government less than $500 million. The idea, known as “privatization,” was shelved indefinitely.