In theory, debt generated by asset recycling is paid back through private sector partners finding efficiencies or increased government revenue driven economic growth. While this may work in the private sector, it does not work for governments. In practice, asset recycling is similar to other privatization schemes – such as public-private partnerships – that cost governments and citizens more money than traditional public debt-financed investment.
The idea being promoted by the Liberal government through its “Basic Income Guarantee” is that we should be moving towards a system where the government redistributes wealth by giving individuals money directly. As wealth redistribution goes, this is an inherently right-wing approach. It depends on the private sector to provide services that those on the Guarantee can afford, it does nothing to improve the employment prospects for those on the Guarantee, and in the end likely only increases inequality. Instead, the government should be investing this money in public services that are provided at no cost to everyone, an initiative that will create more jobs in the process.
Neoliberalism as an economic ideology is spreading throughout the world via international financial institutions and transnational corporate hegemony. The effects of this colonial phenomenon is especially acute in Latin America where many nations faced debt crises directly related to the international economic system. In order for many nations in Latin America to deal with this economic crisis, they were forced to cede democratic control of their economies to these international actors. Although democratic procedures exist in most countries in Latin America which are implementing the reforms, real democracy is maimed by international economic interference in policy-making. Procedural democracy legitimizes the damaging effects which ensue from the neoliberal reform process. This is evident when we examine the nature of international lending institutions, the power of international capital, the degradation of worker and peasant lives, and the lack of popular opposition.