With devastating austerity measures being imposed nationwide — state and local governments are facing a lot of budget crunches.

In an effort to make ends meet and bring in money — many of them are handing over control of public services to private corporations.

State and local governments are doing that because of the Reagan-era argument that private corporations are "always" able to run things more efficiently than governments.

But while privatization and outsourcing of public services may make sense on paper — it turns out they haven't worked for the people. George Washington and those other guys were onto something when they created a government for this nation!

A new report from the Colorado Center for Policy Studies at the University of Colorado has found that society pays a steep price for the outsourcing of government functions, with things like a weakened social infrastructure, increased economic inequality, poorer services or quality of care and hollowed-out civic institutions.

For example, the report noted that an analysis of the outsourcing of public healthcare in hundreds of counties across America found that, “Although primary care hours and access increased, the quality and quantity of well-baby care and homeâ€care for the elderly fell. Costs of providing care did fall, but at the ‘price’ of less access and quality in some critical areas.”

And as Michelle Chen points out over at The Nation, “When Shelby County Schools in Memphis contracted out janitorial services, what was supposed to be a more cost-effective labor arrangement collapsed when principals complained that that their schools were ‘not being cleaned properly,’ and the contract workers complained that they had been shorted on pay. In the process, 750 school jobs were lost for a ‘cost cutting’ contract that in the end, cheated workers and the community.”

And we’ve all seen what a disaster privatized prisons and Blackwater over in Iraq have been.

Meanwhile, when governments outsource public services and jobs to private corporations, many workers lose their jobs. And those who are lucky enough to keep their jobs are often forced to take pay cuts and deal with harsh working conditions so the CEOs and stockholders can take home more money.

A Senate investigation found that, “almost 30 percent of the top violators of federal wage and safety laws are also current federal contractors."

And when workers’ wages decrease, local economies suffer. The Colorado Center report found that privatization of a public workforce leads to increased inequality and hinders long-term social mobility.

The bottom-line here is that while outsourcing and privatizing public functions and services may look good on the fiscal balance sheet, it’s bad news for American workers, local communities and society as a whole.

It's time to say that Reagan was wrong — and stop letting governments auction off public jobs and services to the highest bidder.