New York and Britain both face huge fiscal imbalances, partly as a result of their reliance on the volatile financial sector for too much tax revenue. And both may come up with the same purported partial solution to the problem: sales of public assets — in Britain, their half of the Channel Tunnel, plus other stuff; here, maybe the thruway or the lottery — to raise easy cash.

What does the Financial Times have to say about Britain’s plan? It notes that “there are often good reasons to privatise assets,” including private-sector efficiencies.

But among those good reasons isn’t that the government doing the sale is desperate for money, and everyone knows it — as is the case on both sides of the pond. As the paper’s editorial continues:

[Asset sales] can do nothing to help cope with the UK’s fiscal problem. Indeed, in practice, these sales may even make the situation worse. Governments have time horizons that are longer than those of any private investors. … This permanence is one of the reasons why governments enjoy borrowing costs that are significantly lower …. The combination of an ultra-long time horizon and cheap borrowing means that most assets are worth more in real terms to governments than they are to private investors — especially when the private sector is suffering a credit freeze. … [S]tates should expect to be worse off following such disposals.

You may also like

Lawmakers Mull Medicaid Proposals That Would Speed New York Toward a Fiscal Cliff

As a budget deal nears in Albany, reining in spiraling Medicaid costs seems to be the last thing on anyone's mind. Governor Cuomo is advancing only Read More

A Federal Emergency Rule Is Inflating New York’s Medicaid Enrollment

Strings attached to federal coronavirus relief funding appear to be inflating New York's Medicaid enrollment – and costs – at a time when the state faces unprecedented deficits. Read More

New York Medicaid Spending Is Projected to Jump 6% in Fiscal Year 2021 (UPDATED)

Despite a round of cost-cutting this spring, New York's Medicaid spending is on track to jump by 6 percent this year thanks to a massive influx of federal aid. Read More

New York Has Widened Its Lead in Per-Capita Spending on Medicaid

New York's per-capita Medicaid spending soared to more than double the nationwide rate in 2018, widening its gap with the other 49 states. Read More

New York’s Medicaid Enrollment Surges to an All-Time High

New York's Medicaid program is growing at its fastest rate in six years, with a quarter-million additional enrollees landing in the safety-net health plan during the first three months of the coronavirus pandemic.  Read More

More fiscal turmoil for Medicaid

In a sign of pandemic-related strain on state finances, the Cuomo administration is postponing a series of multi-billion-dollar Medicaid payments over the next three months. Read More

DOH posts age & county data

#NYCoronavirus: The state Health Department released additional coronavirus data that gives a clearer picture of which counties and age groups have been hardest hit by the pandemic so far. Read More

Winning last year’s battle

The new state budget finally takes credible steps to address the Medicaid crisis of recent history. What's missing is a clear plan for weathering the far larger crisis of the present and future. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@EmpireCenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!