Flame — HabitableZone

Flame » in reply to Conservatives are not opposed to deficits.

This one is.
TB — (archived)

As a general rule, the private sector will tend to put money into things that will return real wealth. Senators and congressmen will tend to put money into things that will enhance their political power and keep donations coming. All else being equal, I think you get more economic benefit by leaving money in the private sector than by taking it away from the private sector and filtering it through Washington.

Of course, it's more complicated in real life.

Private investors (as we have seen) will "invest" in things where money is "returned" as an artificial increase in value (the "tulip" phenomenon) instead of real new wealth. Ideally, they should go hugely broke doing this while the smarter investors make money. Ideally. (Was there a "tulip bailout program" in the Netherlands?)

Politicians can, once in a while, put money into something that will eventually encourage economic growth. Infrastructure can be one of these things, but the way things are set up in this country, most infrastructure is supposed to be locally funded. Of course, states and localities are tickled pink that the Feds are willing to pour cash into them that they don't have to raise local taxes for. Unfortunately, most government spending ends up down ratholes (viewed from a wealth-creation perspective).

Now, if you don't take the money from the private sector, but just borrow or print it, doesn't everybody win? Or is there something down the road we should be looking out for?

As an aside, it's weird how the theories behind the "Bridge to Nowhere" have suddenly been rehabilitated when the right party is pushing them.

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