Government spending on research results in new drugs and medications which improve peoples qualities of life.
Government investment in clean energy promises to reduce the tens of thousands of people adversely affected by pollution in our nation annually and also provide us with a hugely viable export technology.
Government spending on bureaus like the FDA, EPA, and BBB give consumers and citizens access to outlets for complaints against dirty businesses and give us a decent amount of protection against those who would harm us to gain more of those dollars you think they'd rather have in their own pocket.
Meanwhile, the original owner might buy a boat while thousands of people have shoddy products and no recourse. Or they might buy a nice car while people deal with the pollution from their industry.
In the end, I believe it to be about balance but lets not pretend that a lot of the research that goes into the vast majority of the technologically advanced products doesn't come from tax dollars and lets start ensuring that we as citizens benefit just as much as the owner of these big businesses which can (and should) capitalize on these investments made by society for the good of society.
Then we can all go back to our enjoyable lives of digging up and reburying jars of money.
Some evidence to the contrary: http://www.brookings.edu/~/media/research/files/papers/2015/...
There's always costs of utility forgone to putting upper bounds on heterogeneous consumer preferences, and as it turns out, they can be rather severe.
Well, that's clearly not the case for the BBB (which is a private nonprofit), unless you are counting granting tax exempt status to an organization as a form of "government spending". I tend to agree with regard to the FDA and EPA, most of the time, but its not exactly a non-controversial claim and regulatory capture is always a concern.
For example, funding a bunch of national infrastructure projects would have horrible returns, being a 100% loss to the person who spent the money. But that money circulates in the economy, creating demand, and we get the infrastructure afterwards as well.
That's speculation, of course, but we can look back to the New Deal to see that it's worked at least once before, and look at current-day corporate balance sheets and their underwhelming investment in demand-creating ventures to see that what we're doing now is not working. If the goal was to generate novel tax-avoidance schemes like the double-irish, though, we'd be a rousing success, so there's that.
Also, beware of the broken window fallacy. Unproductive make-work is of no net benefit to society, and if foregone productive work is the opportunity cost, it's a net loss. Obviously, infrastructure investment is ideally productive, but the government has a pretty terrible track record for effectively spending money.
Maybe nobody who is all of honest, aware of the relevant documented facts, and sufficiently intelligent does. Maybe.
But there are certainly people who are smart, people who are honest, and even people who are smart and honest that believe that the New Deal exacerbated the Depression in the way described.
(Note that I very much do not endorse the idea that these beliefs are correct.)
If only more legislation was evidence-based..
Depends on how you define "better". Who is to say that "better for society" trumps "better for the individual". There's no particular objective reason to take that position over the one favoring individual choice.
https://en.wikipedia.org/wiki/Tragedy_of_the_commons*
If everybody owns something, then nobody owns it. We should probably rethink our notion of what "the commons" means, vis-a-vis property rights.
Good point. Of course, that rethink might go in either way, moving more things from public to private or from private to public. It's a good idea to periodically review what we consider public property and try to make it more consistent with the idea of privatizing externalities.
Society of course, thus democracy.
> There's no particular objective reason to take that position over the one favoring individual choice.
Yes there is, the will of the majority.
It depends. If the original owners were a handful of wealthy oligarchs, that's likely to be worse (ie. more centralized) than as spent by a large, distributed bureaucracy. If the original owners were a large population of mostly middle-income and poor, that's likely to be better (ie. more decentralized) than government spending/investment.
> government spending in general is essentially a drag
If government is a centralizing force, then yes. If government is a decentralizing force -- improving the mechanism of the free market -- then it's increasing efficiency.
Politicians spend money on vain projects to get themselves popular and re-elected- how is that not worse than a wealthy oligarch spending money on a gold plated fountain? At least the gold plated fountain would not be built on promises that the future (unborn) taxpayers will make up the tab.
The point here is that people tend to see the government as a relatively benign spender who sometimes gives money to others, while they automatically see a rich person spending money as terribly misdirected. When you impugn a government with perfect morals and individuals with terrible morals the thinking that results simply has to be wrong.
Isn't it highly unlikely that tax dollars will be spent or invested more wisely than the original owners of those dollars would have spent or invested them, since no-one would have known the owners' preferences as well as the owners themselves?
Keynesian pump-priming ends up thinking it makes economic sense to tax people for money to fill up jars, tax people to pay for workers to fill jars with cash, tax people to pay for workers to bury the jars, and tax people to pay for workers to dig the jars up. Although I think there is a very valuable insight about velocities and derivatives rather than simply values-at-times, I think that government spending in general is essentially a drag on the economy: a necessary and inevitable malinvestment, but one to be avoided where possible.