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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (6161)	3/17/2009 12:40:59 PM
From: TimF	Read Replies (1) \| Respond to of 86355

There are some investments that government can make where the private sector won't go because you'd have to large of free rider problem, for example basic scientific research, or many types of roads (high traffic limited access roads could be toll roads, and local courts could be built by developers or HOAs, but I can't see any business model for most roads). But in general I don't think the government is better at finding more efficient investment opportunities than the private sector. And that's even if its really trying to (which you want it to do), but the reality is its not likely to try to do so, the incentives on politicians generally don't run that way. And its not just an issue of investment, privately decided consumption is likely to give people more of what they actually want to consume than any government direction of wealth. Or to put it another way I think the return to the economy is generally larger, potentially much larger, for having the money left in the private sector than having the government spend it. Even with a government that's actually looking for productive useful investments, and esp. in real governments with the real world political process and incentives. Also as government spending goes up this factor becomes stronger. A very small government could "pick the low hanging fruit" of areas that are obviously good areas for the government to participate in. By the time a government gets pretty large there is less and less low hanging fruit, and to the extent its is being left "unpicked", we should try to pick it by transferring money from the less sensible areas of government spending rather than increasing the total from its already very high level. When spending is this high and increasing this much its obvious that we aren't striking a balance, or crowding out beneficial spending, or if we are we're doing so with non-beneficial spending, not with tax revenue that is too low.