Some people argue that the private sector can always provide more cost-effective services than the government?

Technically, this isn't true. Governments are just really bad at crunching numbers.

For example, when privatizing Chicago's parking meters, they thought that the lease operators would only make a profit of a billion (still quite a lot of money to give up)

Now, as Chicago suffers from a budget crisis, new estimates by the lease operators have shown that a profit of over $9 billion is expected.

In another case of bad number crunching, the Freedom Tower (which was proposed to replace Ground Zero) was supposed to be finished by 2006 with the aid of private developers.As of now, the Freedom Tower isn't built and is severely over budget.

The point is, politicians are bad at math.

It depends on the service. I live in an area where electricity providers are all private sector vendors who buy their electricity from various sources (publicly owned as well as privately owned) and who compete based on cost of service. They use another company to distribute the electricity. It is fairer to the consumer and more cost-effective.

40 miles to the north of us there is one electricity provider, a government-owned utility.

Utilities are generally a good example of services that can usually be provided by a government utility as well or better than a private sector business. Nearly all water utilities are municipally owned.

We can also look at services like the US Postal Service. Delivery and messaging services can be handled by private companies like UPS and FedEx, but UPS and FedEx don't have the added burden of home delivery mail.

Canada does well with government-owned railroads and airlines. The United States has had few true successes with government ownership of railroads (AMTRAK and ConRail) and has never operated a common carrier airline. On the other hand privately operated railroads and airlines have both often succeeded only with government subsidies.

Generally I think the private sector does best when and where businesses can compete with each other to provide good service at a fair cost. It is less successful when providing services that typically lose money and doing so in a noncompetitive environment.

I am a supporter of private sector business and a free market economy whenever and wherever possible. It has to be noted it isn't always possible or workable.

Yes, the post office was much more efficient and cost effective when it was part of the government. Since 1981 it has been an independent quasi-private agency and has been in the red the whole time.

Municipal water systems seem to be run very efficiently where I live; water still costs around half a penny a gallon.

Of course the guy who was the city water manager got put into prison for taking bribes from chemical vendors :)

Private industry's main goal is to make money. They will make their provision of services every bit as expensive as they think they can charge. Efficiency doesn't come into it, except when it comes to the corporation's own bottom line.

Police, fire, and all the services you take for granted because they are so good and they are government run