From: bakken@cs.arizona.edu (Dave Bakken)
Newsgroups: misc.invest
Subject: Re:  Effects of the U.S. Debt
Date: 1 Oct 92 20:33:16 GMT
Organization: U of Arizona CS Dept, Tucson

In article <9210011732.AA02371@inet-gw-1.pa.dec.com> GCTHORNE@idbsu.idbsu.edu ("Broward "The Stick in The Mud" Horne") writes:
>From: fischer@li.serum.kodak.com (Chris Fischer (x39613))
>Subject: Re: Effects of U.S. national debt
>Message-ID: <1992Oct1.113056.18468@clpd.kodak.com>
>Sender: news@clpd.kodak.com
>Nntp-Posting-Host: li
>Organization: Clinical Products Division, Eastman Kodak Company
>References: <9209302356.AA18495@inet-gw-1.pa.dec.com>
>Date: Thu, 1 Oct 1992 11:30:56 GMT
>Lines: 44
>
>>More like they got wealthy STARTING their own company, and then shared
>>some of it with the public.

...

>           Consider this.  On paper, Bill Gates is worth 7 billion.
>      All due to shares in Microsoft.  Yet, if we examine the actual
>      COMPANY, we find it can be easily duplicated for a few hundred
>      million dollars.

You could possibly duplicate the shiny buildings and hire people with
equivalent skills (and willingness to work long hours).  But you're
sadly mistaken if you think this sum could produce a company that
could come anywhere near to producing Microsoft's revenues.  They have a
huge installed base, a reputation among software users, a very wide
variety of products, etc.  that just could not be duplicated without 
many years of producing good and varied software.  And anyone who tried
to do this would have a high probability of failing (to become anywhere
near as big, or even breaking even).

Don't get me wrong---I don't like Microsoft's hardball tactics
(I hope the antitrust stuff sticks), and much of their technology
has been and is antiquated (can you spell "Q-DOS"), but one has to be
impressed at the very least with their business acumen.

>           Consider this.  If Gates were to dump all his stock today,
>      it would plummet in value.  It's true value isn't anywhere near
>      7 billion, yet our economy TREATS 7 billion as his true wealth.

If any person or persons tried to sell too much of any asset in too
short of a time, the basic laws of supply and demand will force the
price down.   This is true even if they think the long-term prospects
are good for the asset, but they just want to diversify more, buy
an expensive toy, etc.  This has nothing to do with the fact that this asset
is shares of stock, let alone in stock of a company that Gates founded.

If Gates sold his position over a long enough time (years?) he
would probably get his money out without lowering the price.

>
>            And while I don't have the numbers to prove it ( yet ), I'd
>      be willing to be that this illusion of wealth has driven
>      marginal costs of many things higher than a true "market" economy
>      would allow.  Such as....  <tada dada>
>
>            Commerical real estate.  Now eating our banks alive.

I'll tell you what can drive up the cost of things artificially---
our massive borrowing.  How much do you think people would pay
for a house that sells for $100,000 today if they had to pay cash?
Probably $25,000 or $30,000.  And how much lower would interest
rates be if our government didn't compete for capital by
borrowing so much (OK, they're low now because the economy is weak,
but I mean in the long run)?

And, as for the redistribution of wealth, you seem to assume
that all wealthy people got their wealth by exploiting the
(proletariat!!??) masses, so we must counter this by taking it
away from them.  Don't you think that someone who made a fortune
by skill, sweat, or maybe even just plain luck should be free
from having the government steal it from them?  Property rights
are some of the most basic rights one can have.  But I forget
which wag said that ``Those proposing to rob from Peter to pay
Paul can usually count on the support of Paul.''
--
Dave Bakken                               Internet: bakken@cs.arizona.edu
Dept. of Computer Science; U of Arizona   Voice:    +1 602 621 4098      
Tucson, AZ 85721; USA                     FAX:      +1 602 621 4246
The fact that you're paranoid doesn't prove they're *not* out to get you.
Newsgroups: misc.invest