# What Are The True Costs of Government Spending? **URL:** \ **Category:** Great Debates\ **Created:** [February 19, 2013, 3:42pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799 "2013-02-19T15:42:25Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 20, 2013, 8:42pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/21 "2013-02-20T20:42:30Z")
> [@WillFarnaby](#): > > If the government takes our money, $100,000,000,000, purchases iron with it and attempts to fill in the Grand Canyon, we are poorer as a “nation” because we have less iron in productive use. > > If the government takes our money, $100,000,000,000, purchases iron with it and attempts to build bridges how do we know those bridges are worth that sum to th people who use them? Easily enough. Measure decrease in travel time due to a more direct route or reduced backups. All that time spent in traffic is wasted. Your amount is typically absurd, but do you doubt that the Interstate Highway System was not a good investment? I remember as a kid going from NY to Washington on US 1 and other non-interstates - and it took a long time and was not much fun. > [@](#): > > On the free market, products are bought and sold for a profit. This is how a provider of services knows that he is making society richer. The value of his output is higher than the value of his input. Government extorts money and puts it to use in ways that can never be evaluated on a profit/loss basis. They can never know whether or not they are making society richer. It is possible that the are, but it cannot be known, and a hunch tells me that in the vast majority of cases, they are not. The value of their input is known, but the value of their output can never be known. Except when they are sold for a loss. Except when private investments are totally stupid. I don’t know, maybe keeping people from going hungry is not a good profit/loss investment for the government, but I think it is a pretty good one. Private charities can’t do this job to the extent required, and especially can’t do it in times of economic decline, where people have less money to donate but the need is greater. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 20, 2013, 8:49pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/22 "2013-02-20T20:49:44Z")
> [@ITR\_champion](#): > > I’d say that if heavy taxes on Bob cause Bob to work less, not work at all, or leave for Singapore because the tax rates there are lower, then that does cost an appreciable amount. Such costs may be difficult to pin down and are not counted in any official statistics, but they certainly exist. As I mentioned, in India and many other third-world countries, sky-high tax rates are, or until recently were, the central fact of economic life and they certainly stifled a great deal of economic activity Very high tax rates do cause problems, but you might have noticed the recent studies showing that people don’t actually move because of taxes very often. Especially since the US has pretty low tax rates. And it is a bit more difficult to pick up and leave for most people. Singapore? Why wouldn’t someone go there? Maybe because he wants to chew gum without going to jail? Maybe because he doesn’t want to learn Chinese? Maybe because he doesn’t want to live in a dictatorship, benevolent as it might be? Maybe because he wants to be able to drive five miles not in the middle of hordes of people? And maybe because he doesn’t want to be 12 time zones away from colleagues. We have lots of rich people in Silicon Valley? Why don’t they leave? Because this is the place where it is at, this is the place you can change jobs without impact on your family, this is the place where you can pull together experts from all sorts of fields at a moments notice. The governor of Iowa was here trying to poach jobs. Good luck. Someone moving there to avoid taxes is going to lose a lot more in future earnings than he is likely to save. Unless he is into e-corn that is. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [February 20, 2013, 9:14pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/23 "2013-02-20T21:14:39Z")
> [@AdamF](#): > > No it’s not. You are employing a person who in turn spends the money he earns and returns it back to the economy. Think about what you are saying. If this is a good thing, then we could improve the economy by requiring everyone to fill out a gazillion forms about nothing for which many would have to hire lawyers for. This is like the broken window fallacy. Money spent complying with tax law is wasted money that could be used for something else. The tax code doesn’t, by its nature, have to be so complex that most people simply can’t understand it. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [February 20, 2013, 9:15pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/24 "2013-02-20T21:15:57Z")
Thank you, **Voyager**. It is frustrating to listen over and over to the right-wing memes that private managers always do, magically, what’s best for their stockholders, while government managers just do something stupid or what their constituents want. The meme about private managers is baffling to those who’ve seen many private managers in action. The meme about public workers would be insulting, except the same right-wingers will complain when the public workers do _not_ stupidly do what their stupid constituents want. :smack: Please do come back and help play whack-a-mole. The right-wing errors you’ve just refuted will appear in another SDMB thread within a week or two. ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [February 20, 2013, 9:48pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/25 "2013-02-20T21:48:08Z")
> [@Voyager](#): > > It is telling that the [bridge to nowhere](http://en.wikipedia.org/wiki/Gravina_Island_Bridge) so beloved of conservatives in this thread actually never got built. There were two bridges to nowhere. Money originally earmarked for a bridge to Gravina Island and another one leading to a swamp near Anchorage[was diverted to other pork-barrel projects in Alaska](http://reason.com/archives/2005/12/23/the-bridges-are-back). There certainly was no instance of politicians deciding that the money shouldn’t be spent, or even a token attempt to do so, only attempts to move the money from one federal project to another. Incidentally, the House of Representatives is trying to get the Anchorage swamp bridge (named “Don Young’s Way” without a trace of irony) [back](http://www.thefiscaltimes.com/Articles/2012/08/13/New-Law-Puts-Bridge-to-Nowhere-Back-on-Track.aspx#page1) into the budget. Unless the Senate blocks it, the American taxpayers will get the joy of paying for this very expensive and utterly useless project _twice_. > [@](#): > > And remember noted liberals Ted Stevens and Sarah Palin supported it. What’s your point? > [@](#): > > It is cute - and stupid - to assume that all government projects are pork barrel. Sorry, the money spent to widen the freeway I drive every day saved me 20 - 30 minutes a day in commute time, and lots of other Silicon Valley workers similar amounts of time. When we can leave work later or arrive earlier that increased productivity goes right into the economy. Making sure the bridges around here don’t fall down in earthquakes might be a reasonably productive investment also. > Are you objecting to the government contracting work out to companies who are expert in the work? That seems reasonable to me, and that money is spent right in the US of A. > > Now certainly not all government money is spent optimally. Guess what - not all private money is spent optimally either. Remember the CEO of Tyco who used company money to buy gold crap for his house and to throw big parties? Look at HP, who has wasted billions of dollars on bad acquisitions. The money spent on the freeway near me was a hell of a better investment than that. The question asked in this thread is not whether all government spending is wasteful, nor whether all non-government spending is wasteful, but rather whether there are costs to government spending. As long as government spending contains within it a subset of wasteful spending, there are. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 21, 2013, 1:02am UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/26 "2013-02-21T01:02:01Z")
> [@ITR\_champion](#): > > There were two bridges to nowhere. Money originally earmarked for a bridge to Gravina Island and another one leading to a swamp near Anchorage[was diverted to other pork-barrel projects in Alaska](http://reason.com/archives/2005/12/23/the-bridges-are-back). There certainly was no instance of politicians deciding that the money shouldn’t be spent, or even a token attempt to do so, only attempts to move the money from one federal project to another. Incidentally, the House of Representatives is trying to get the Anchorage swamp bridge (named “Don Young’s Way” without a trace of irony) [back](http://www.thefiscaltimes.com/Articles/2012/08/13/New-Law-Puts-Bridge-to-Nowhere-Back-on-Track.aspx#page1) into the budget. Unless the Senate blocks it, the American taxpayers will get the joy of paying for this very expensive and utterly useless project _twice_. Actually the wiki page says that the first bridge was resisted by Coburn in order to divert the money to repair the Lake Ponchatrain causeway which was damaged by Katrina. As a former Louisiana resident I can tell you that this is a vital bridge. > [@](#): > > The question asked in this thread is not whether all government spending is wasteful, nor whether all non-government spending is wasteful, but rather whether there are costs to government spending. As long as government spending contains within it a subset of wasteful spending, there are. No one disputed the statement that some government projects are not very useful. But the general impression of calling all of them pork barrel is that none of them are. We might as well have a thread about the true costs of private spending. HP’s screwups had major costs to its investors, probably to its employees, and, if R&D gets cut to save money, to industry as a whole. But we’d never have that thread because there is not a contingent of people attacking just about everything that private industry does. ---
**Author:** ![yorick73](https://avatars.discourse-cdn.com/v4/letter/y/b5a626/32.png) [@yorick73](https://boards.straightdope.com/u/yorick73)\ **Post date:** [February 21, 2013, 1:06am UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/27 "2013-02-21T01:06:55Z")
> [@yorick73](#): > > Exactly. There is less incentive to work if your labor (i.e. your money) is being used to help the “collective”. Remember that the group is made up of individuals. Many of those individuals (usually the most productive) will be poorer. The government is taking from the most productive to give to the least. Common sense dictates that the most productive will not be as motivated to be as productive under these circumstances and the “collective” will suffer as a result. Maybe not at current levels but my point is that there is a level at which people will decide it is not worth producing more. Obviously my example is an extreme to prove a point. If government takes 100% of our money in order to redistribute it then people will have less incentive to go the extra mile or to be more productive. There is no immediate loss of wealth for the collective but, over time, the entire society will suffer as the most productive see no value in doing more than they absolutely have to do. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 21, 2013, 1:08am UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/28 "2013-02-21T01:08:18Z")
> [@John\_Mace](#): > > Think about what you are saying. If this is a good thing, then we could improve the economy by requiring everyone to fill out a gazillion forms about nothing for which many would have to hire lawyers for. > > This is like the broken window fallacy. Money spent complying with tax law is wasted money that could be used for something else. The tax code doesn’t, by its nature, have to be so complex that most people simply can’t understand it. Just about everyone thinks that simplifying the tax code is a good thing. How we go about doing it is something else. Our taxes are probably more complex than most, since my wife is a writer and has all sorts of interesting deductions on Schedule C that most people don’t have, but pretty much everything makes sense. But, I bet you are for the R&D tax credit, right? Helps encourage innovation. I filled out a tiny bit of that one year and it was incredibly painful, and the company had to collect probably hundreds of them. If you eliminate stuff you eliminate the benefits - or the apparent benefits. If you simplify too much you risk fraud. But our tax code is progressive in the sense that those with the most money spend the most time on taxes. Sounds fair to me. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [February 21, 2013, 2:05am UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/29 "2013-02-21T02:05:15Z")
> [@Voyager](#): > > Easily enough. Measure decrease in travel time due to a more direct route or reduced backups. All that time spent in traffic is wasted. Your amount is typically absurd, but do you doubt that the Interstate Highway System was not a good investment? I remember as a kid going from NY to Washington on US 1 and other non-interstates - and it took a long time and was not much fun. Who is to say that the money stolen from taxpayers wouldn’t have went to uses that, for them, were things they value more than taking a fast fun trip from NY to Washington? I never said that the highway system wasn’t a good investment. I simply said when you extort money from someone to pay for something you think is of a certain value to them, there is liable to be a miscalculation. No. Not " easily enough". You are applying your own valuations to others. If there was value in having a bridge, an entrepreneur would calculate that the value others place on having this faster route is greater than the costs to construct and maintain the bridge over a certain amount of years. He would go to investors with his research and they would shoulder the risk of this investment. Taxpayers who would never use the bridge, and therefore value it at nearly zero, wouldn’t be forced to pay anything. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [February 21, 2013, 2:20am UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/30 "2013-02-21T02:20:25Z")
> [@Voyager](#): > > Except when they are sold for a loss. Except when private investments are totally stupid. Thank you, **Voyager** , for making my point for me. Except you left out the part that when a private investment goes under, those investors lose money and therefore have less money to make future unwise investments, and have less ability to direct resources to these unproductive endeavors. When government makes a bad investment, they continue to hold office and make decisions. Please tell me you’re not one of those naive folks that say voting is an adequate check on bad governmental policy. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [February 21, 2013, 2:46pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/31 "2013-02-21T14:46:07Z")
> [@AdamF](#): > > No it’s not. You are employing a person who in turn spends the money he earns and returns it back to the economy. > > First, you are arguing that taxes decrease the monetary value of your work. Second, you are arguing that taxes increase the monetary value of your work. I don’t see how it can be both. All of the money paid goes to the person, but that person produces nothing. The money would still be spent or invested if the person who earned it kept it. People working at unproductive jobs are a cost to the economy. The second argument is not that taxes increase the value of work it is that they receive the value without the work. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [February 21, 2013, 3:09pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/32 "2013-02-21T15:09:55Z")
No one argues that 100% of government spending is wasteful or that 100% of private spending is used optimally. The question is what are the incentives and how do they play out. Every group of people has a principle agent problem. It is in a boss’ interest to have employees wash his car and do his errands instead of working on the firm’s tasks. So firms set up various ways to monitor the employees and the bosses to make sure the efforts are being directed to tasks that add to the firm’s value. Firms that are succesful at this grow and firms that are unsuccesful go out of business. Politicians have the same principle agent problems. They try to use government money to benefit themselves instead of the people. Since government does not go out of business the only check on politicians are prosecutions and being voted out of office. However spending that is just wasteful and not corrupt is not illegal and can help the politician get reelected. The only restraint is the amount of money that can be taxed or borrowed. Thus Sarah Palin supports the bridge to nowhere because while she is a great american she is not a saint. Every incumbent politician campaigns that he should be re-elected because he can bring home the bacon to his district or state. The return on the investment does not have to be positive it just has to be greater than the amount spent by the constituents. Since the residents of Ketchikan get all of the benefit and a small fraction of the cost, it is rational for them to support the bridge to nowhere. This is the tragedy of the commons as applied to government spending. This is why we have ethanol subsidies, sugar subsidies, 100 buildings in West Virginia with a Klansman’s name of them, the UAW bailout, flood insurance subsidies, and a million other forms of government waste. I challenge anyone to construct a plausible model where government spending is more efficient than private spending. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 21, 2013, 8:34pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/33 "2013-02-21T20:34:01Z")
> [@WillFarnaby](#): > > Who is to say that the money stolen from taxpayers wouldn’t have went to uses that, for them, were things they value more than taking a fast fun trip from NY to Washington? I never said that the highway system wasn’t a good investment. I simply said when you extort money from someone to pay for something you think is of a certain value to them, there is liable to be a miscalculation. > > No. Not " easily enough". You are applying your own valuations to others. If there was value in having a bridge, an entrepreneur would calculate that the value others place on having this faster route is greater than the costs to construct and maintain the bridge over a certain amount of years. He would go to investors with his research and they would shoulder the risk of this investment. Taxpayers who would never use the bridge, and therefore value it at nearly zero, wouldn’t be forced to pay anything. Ah, “extort,” “steal,”, the marks of an extreme position. This theft was done by duly elected representatives under duly passed laws. If that is theft then so is paying for cops or the military. BTW, the justification for the interstate highway system was to provide an effective way of getting military equipment across the country. I’m not sure of the business case for that. Lots of bridges are based on tolls - certainly all the ones across the Bay are. But there are also tons of minor bridges, across creeks or narrow rivers. Should they be private also? What would the economic cost be of making people pay tolls every quarter mile? I pay for your bridge I never go over and you pay for mine. It pretty much evens out. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 21, 2013, 8:42pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/34 "2013-02-21T20:42:09Z")
> [@WillFarnaby](#): > > Thank you, **Voyager** , for making my point for me. Except you left out the part that when a private investment goes under, those investors lose money and therefore have less money to make future unwise investments, and have less ability to direct resources to these unproductive endeavors. When government makes a bad investment, they continue to hold office and make decisions. Please tell me you’re not one of those naive folks that say voting is an adequate check on bad governmental policy. Sure, the stockholder rise in revolt and force out the CEOs who make bad investments. Pardon me while I recover from my laughing fit. Even with gerrrymandering your average Congressional election is a lot more democratic than your board of directors election. How many candidates run for that, unless there is a hostile takepver? One. Just like Cuba. I’m not saying that businesses are worse than government - just that the same things apply. The Republicans screwed up the economy, and got kicked out. The HP board screwed up the company and is still there. And of course investment goals are a lot different between government and industry. Everyone is an indirect customer of government, so things that benefit all without direct payment are a good investment. Not so with industry. They are different beasts which are there for different reasons. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 21, 2013, 8:56pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/35 "2013-02-21T20:56:00Z")
> [@puddleglum](#): > > No one argues that 100% of government spending is wasteful or that 100% of private spending is used optimally. The question is what are the incentives and how do they play out. Every group of people has a principle agent problem. It is in a boss’ interest to have employees wash his car and do his errands instead of working on the firm’s tasks. So firms set up various ways to monitor the employees and the bosses to make sure the efforts are being directed to tasks that add to the firm’s value. Firms that are succesful at this grow and firms that are unsuccesful go out of business. > Politicians have the same principle agent problems. They try to use government money to benefit themselves instead of the people. Since government does not go out of business the only check on politicians are prosecutions and being voted out of office. However spending that is just wasteful and not corrupt is not illegal and can help the politician get reelected. The only restraint is the amount of money that can be taxed or borrowed. Thus Sarah Palin supports the bridge to nowhere because while she is a great american she is not a saint. Every incumbent politician campaigns that he should be re-elected because he can bring home the bacon to his district or state. The return on the investment does not have to be positive it just has to be greater than the amount spent by the constituents. Since the residents of Ketchikan get all of the benefit and a small fraction of the cost, it is rational for them to support the bridge to nowhere. This is the tragedy of the commons as applied to government spending. The purpose of the press, and things like open meeting laws, is to combat the government problem as much as possible. And we have similar issues in industry. When CEOs move corporate headquarters, they wind up near the home of the CEO. There are plenty of cases of execs getting sweetheart loans, and we still have the compensation without adequate metrics problem. People are people. Corporations are no more inherently bad because they are sometimes run by crooks than government is inherently bad because elected officials are sometimes crooks. > [@](#): > > This is why we have ethanol subsidies, sugar subsidies, 100 buildings in West Virginia with a Klansman’s name of them, the UAW bailout, flood insurance subsidies, and a million other forms of government waste. By UAW bailout do you mean GM and Chrysler bailout? Is that the new right wing name for it? Because if you do, that has paid off big time. It avoided the massive collapse of manufacturing in the area, and by profits and jobs has pumped lots of money into the economy and the tax base. And it let GM steal market share from the Japanese. This is bad? I just figured out the Klansman must have been Byrd. He admitted he was wrong. You guys should try that some time. > [@](#): > > I challenge anyone to construct a plausible model where government spending is more efficient than private spending. Using what metric for efficiency? Some companies are very efficient, some less so. Ditto for government agencies. I damn well had a better customer experience in my local DMV than in my local WalMart. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [February 21, 2013, 9:39pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/36 "2013-02-21T21:39:43Z")
> [@Voyager](#): > > Sure, the stockholder rise in revolt and force out the CEOs who make bad investments. Pardon me while I recover from my laughing fit. What he hell are you going on about? Where did I say anything about changing CEOs? I said that a company who makes a poor investment has less money than they did before, therefore is able to direct less resources to their unprofitable endeavors. This frees up more resources to be used by wiser entrepreneurs and investors. > [@](#): > > Even with gerrrymandering your average Congressional election is a lot more democratic than your board of directors election.How many candidates run for that, unless there is a hostile takepver? It doesn’t matter for reasons I’ve already laid out, but you refuse to address. > [@](#): > > I’m not saying that businesses are worse than government - just that the same things apply. Which is where you are wrong. If 49% of taxpayers vote against the current government (this is assuming we are offered a legitimate choice which is highly doubtful) nothing happens that effects policy. If 49% of stockholders take a hike, the company would have to adjust its policy accordingly. Same thing with numbers less than 49%. > [@](#): > > Everyone is an indirect customer of government, so things that benefit all without direct payment are a good investment. Not so with industry. Too bad things that “benefit all” only exist in comic book versions of reality. Every government policy has a winner and a loser. Simple as that. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 21, 2013, 11:35pm UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/37 "2013-02-21T23:35:51Z")
> [@WillFarnaby](#): > > What he hell are you going on about? Where did I say anything about changing CEOs? I said that a company who makes a poor investment has less money than they did before, therefore is able to direct less resources to their unprofitable endeavors. This frees up more resources to be used by wiser entrepreneurs and investors. Or to their profitable ones, or to their employees. Seldom to their executive management, though. And this does not distinguish stupid bad investments from bad investments that were good gambles. VCs have mostly bad investments. That is the name of the game. A VC who has 90% success is either psychic or chickenshit. > [@](#): > > It doesn’t matter for reasons I’ve already laid out, but you refuse to address. Unlike CEOs, Congresscritters have to build coalitions. Things that are too blatant and get exposed get shot down. Not just spending money but other crazy things too. (If their constituents want the crazy that is something else.) How often has a CEO not gotten what he wanted because of this board? > [@](#): > > Which is where you are wrong. If 49% of taxpayers vote against the current government (this is assuming we are offered a legitimate choice which is highly doubtful) nothing happens that effects policy. If 49% of stockholders take a hike, the company would have to adjust its policy accordingly. Same thing with numbers less than 49%. Assuming we are not dealing with a rich deal maker trying to take over the company, when are 49% of the stockholders going to take a hike? Their stock is mostly institutionally held, and traded at a moments notice to maximize profit. The little old lady with AT&T stock is a thing of the past, if it ever existed at all. Assuming you have mutual funds, look through their holdings and figure out how many companies you own stock in. Probably a whole bunch, right? How many proxy statements do you get? Probably not many. Institutions are not going to boycott a stock because of bad investments - they may sell and get back in at the bottom. > [@](#): > > Too bad things that “benefit all” only exist in comic book versions of reality. Every government policy has a winner and a loser. Simple as that. Many have lots of winners and few losers. I’d say every single person in this country has benefited from the interstate highway system. Even if you never drive on an interstate, your food has. Are we losers because we pay federal gas tax? I don’t think so. The losers might be the people whose houses got torn down to put in the highway. But the net benefit of this big government project is immense. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [February 22, 2013, 12:51am UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/38 "2013-02-22T00:51:02Z")
To me, bad investments by the government have five bad effects: -1) they remove money that could be used for productive investments -2)they burden taxpayers with higher rates -3) they often are substandard in terms of quality of work (see Boston, “Big Dig”) -4)often, graft and kickbacks are involved -5)money diverted to government projects raises the costs for people who borrow money for productive investments The present Obama government is a test case for this-most of the money spent by the government on “green energy” and electric vehicles has not paid off-most economists doubt that they ever will. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [February 22, 2013, 1:38am UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/39 "2013-02-22T01:38:16Z")
> [@WillFarnaby](#): > > If the government takes our money, $100,000,000,000, purchases iron with it and attempts to fill in the Grand Canyon, we are poorer as a “nation” because we have less iron in productive use. No, you don’t just full it in! You use it to build the skateboarder’s dream – the Canyonpipe! 😃 ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [February 22, 2013, 4:55am UTC](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799/40 "2013-02-22T04:55:25Z")
> [@Voyager](#): > > Easily enough. Measure decrease in travel time due to a more direct route or reduced backups. All that time spent in traffic is wasted. Your amount is typically absurd, but do you doubt that the Interstate Highway System was not a good investment? I remember as a kid going from NY to Washington on US 1 and other non-interstates - and it took a long time and was not much fun. The question isn’t about what are the benefits of government spending, that’s easy. The issues is about the costs, or negative externalities, of those program. The Interstate Highway System provided plenty of benefits, but it also meant the death of the rail industry, while at the same time creating the American dependence of the personal automobile. And now we’re dealing with the results, most notably the environmental impacts of smog, and the need for ever wider highways. An economy dependent Middle Eastern oil leading to multiple wars. When the shift went towards domestic drilling you end up with massive oil spills like Exxon and the Gulf. Now when highways get more and more congested, the only possible solution is to spend more to widen them, so that they can get even more congested. The fact that the government subsidized the highway system means that rail and public transit is fucked in the US. When asked people seem to rather money be spent on wider highways than on a light rail system. Because the government subsidized driving from NY to DC you altered your behaviour. If you had to compare the real cost of flight, vs train, vs what a highway actually costs what do you think you’d end up choosing? [Previous page](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799.md?page=1) [Next page](https://boards.straightdope.com/t/what-are-the-true-costs-of-government-spending/650799.md?page=3)