SWC75
Bored Historian
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- Aug 26, 2011
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The only way an economy can expand is through investment. Consumption makes investment profitable. Both are integral. Lets shift the discussion a bit to note that the difference between economic performance of different economies is a matter of allocation of capital. Government lacks a feedback mechanism and as a result it is an inefficient allocator of capital. Free markets provide the crucial feedback loop so long as businesses are allowed to make a profit or go broke. If the gvt throws money at Solyndra there is no consequence. When gvt transfers money from people that use capital efficiently to others it is acting in the name of humanity. However, it is also creating an inefficient allocation of capital. I assume that you, SWC, agree with me that the correct balance is a matter of judgment. In my judgment, gvt has gone too far and is confiscating too much. Growth is being stifled. Gvt is involved in too many activities. Better to attempt less and do better with a smaller agenda. I would eliminate half the federal gvt: Dept of Education, Commerce etc are unnecessary or duplicative of State activities. Even the EPA is duplicative of torts and the judicial system. One of the most deleterious effects of malignant gvt growth is the making of law by bureaucrats thus giving the public no recourse.
Furthermore, I assume that you also agree with me regarding the crucial role of new investment.
This assumes that businessmen are "efficient" in the allocation of capital. What does "efficient" mean anyway? Efficient in producing profits for them? Or efficient in terms to sending it where society needs it? Are these investors going to invest in Detroit? Are they even going to invest in this country? Will their money be spent here so it can filter through our economy? Will they invest in a way to help people who lost their jobs or pensions?