Newsgroups: talk.politics.misc,alt.politics.elections,alt.politics.perot
Date: Tue, 21 Jul 1992 10:02:04 -0400 
From: Conrad Poelman <cp2w+@andrew.cmu.edu>
Subject: Re: Perot supporters -- we can still take the country back
	<1992Jul20.191301.26384@jpl-devvax.jpl.nasa.gov>

Excerpts from netnews.alt.politics.elections: 20-Jul-92 Re: Perot
supporters -- we .. Allen Halsell@jpl-devvax (2476)

> In article <1992Jul19.063329.25258@noose.ecn.purdue.edu>
> helz@ecn.purdue.edu (Randall A Helzerman) writes:
> >The goverment gets its bux from 2 sources--1) taxation and 2) borrowing.
> >Neither one is actually creating wealth, its just moving it around from
> >one place to another.  Any money that the Government invests is just money
> >which can't be invested by individuals and goverment.
> >
> >Therefore, the goverment can't increase the total amount of investment.
> >So why bother with the government investing in things?  Why not "put people
> >first" and let them invest their own money?

> I'll bite.

> (1) Given that the government can't increase the total amount of
> investment, it can select places to invest the money that will
> encourage growth.  For instance, apart from my work I can't create
> wealth.  But by investing in certain companies that are efficient and
> profitable, I can magnify the effect of my investment.  If I invest
> in a company that is about to go down the tubes, I shrink the effect
> of my investment (possibly down to zero).

> Of course, the government doesn't play the market (thought Bush is
> trying as hard as he can :-) ).  It has its own ways.  The federal
> freeway system is a popular example.  No corporation or group of corps
> could have built this system, and it's arguable that it helped in the
> economic boom of the 50's.

> In addition, the government should have a long-term plan for the
> country that emphasizes well-identified needs (of course,
> free-marketers will disagree with this).  The money that the
> government takes from us can be a powerful lever for soical and
> economic change.

Let's keep the terminology straight.  I think the statement "the
government can't increase the total amount of investment" is true at a
single instant in time, since any government investment causes a
corresponding decrease in private sector investment through taxation or
borrowing.  However, as you said, by "carefully targetting" its
investment the government can improve the economy overall.  (But read
on...)

There are some things which would broadly improve the economy and
increase investement which, for one reason or another, private
enterprise cannot invest in.  These are investments which would benefit
the economy but from which it's not possible to make a profit, or for
some reason it's not possible to run the system competetively (i.e.
multiple providers, customers choose a provider).  I think city roads
fall into the first category, because you can't set up toll booths at
every intersection, and highways fall into the second, because you can
set up toll booths but generally if you want to get from point A to
point B, you have only one or two possible routes to travel.  In the
first sort of situation, government can improve the economy by investing
in these things, since otherwise they'll never get built.  In the second
sort of situation, many think government should regulate the monopoly so
that it doesn't rip off its customers.  I guess for me, the jury's still
out on that one.  At some time, the service never existed and clearly
people got along fine without it, so if the company charges absurd
amounts and people pay it, then even if they complain that they're being
ripped off, they must actually be benefitting from the service by more
than they're paying for it. Also if they charge too much, eventually
other competitors will arise, despite our original assertion that there
can't be competition.  (I mean, there are really no situations in which
there *can't* be competition - generally someone just argues that
competition would be too expensive.)  But that's a peripheral issue so
let's move on...

Now the third situation is that there is some investment in a product or
service from which someone could make a profit and it could be supplied
competetively.  In this case, since they money is being taken out of the
private sector to pay for it, there will only be a benefit to the
economy if somehow the government is making a "smarter" investment than
the private sector.  However, it seems extremely unlikely to me that
this sort of investment, made by politicians looking out for their own
re-election chances, will be "smarter" than the investment decisions
made by private individuals and companies who stand to reap the
financial benefits of good investment.

Therefore, I think the only investments the government should make are
investments in goods/services which, for clear reasons, cannot be
provided by the private sector.  Simply looking at the private sector
and saying "it doesn't seem to be investing enough in <x>" is not a good
reason for government investment, since there's probably a perfectly
good reason why the people who stand to profit or lose from investing in
<x> are avoiding the investment.

--Conrad
Xref: sparky talk.politics.misc:36625 talk.politics.theory:3123