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ScipioCowboy
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This ties into President Obama's larger, philosophical view of the economy. And it's where he and I have a major divergence of views. Basically, the divergence all comes down to one word, and it's a word that Progressives despise:
Profit.
To the Left, it's a dirty word. But, ultimately, profit determines whether or not a good or service is sustainable in the free market -- that is, profit determines whether or not something creates wealth for society as a whole and grows the economy.
If a business doesn't eventually turn a profit, it ceases to exist. One of the harsh realities of economics. So how does the government survive when it doesn't generate profit? Because the government borrows sustainability from the private sector via taxation. Without taxes, the government makes no money.
That's not to say the government is useless. It ensures a certain minimum level of access to resources. That's why roadways are public: regardless of income level, everyone has the same access to roads and bridges. Everyone receives protection from the military and police forces without having to pay. Unemployment benefits, healthcare, and government-funded research are other examples of non-profitable endeavors that provide vital functions.
However, because they aren't profitable in and of themselves, they aren't a basis upon which to build strong and sustained economic growth. Even technologies that the government helped to develop, such as the Internet, weren't profitable until the private sector made them into something that was usable and beneficial to the general population.
This is the flaw in President Obama's philosophy, in my opinion. He labors under the assumption that government programs -- unemployment benefits, stimulus, green energy -- can spearhead strong economic when the government's function isn't generating wealth for society as a whole. Its function is maintaining a social safety net.
Profit.
To the Left, it's a dirty word. But, ultimately, profit determines whether or not a good or service is sustainable in the free market -- that is, profit determines whether or not something creates wealth for society as a whole and grows the economy.
If a business doesn't eventually turn a profit, it ceases to exist. One of the harsh realities of economics. So how does the government survive when it doesn't generate profit? Because the government borrows sustainability from the private sector via taxation. Without taxes, the government makes no money.
That's not to say the government is useless. It ensures a certain minimum level of access to resources. That's why roadways are public: regardless of income level, everyone has the same access to roads and bridges. Everyone receives protection from the military and police forces without having to pay. Unemployment benefits, healthcare, and government-funded research are other examples of non-profitable endeavors that provide vital functions.
However, because they aren't profitable in and of themselves, they aren't a basis upon which to build strong and sustained economic growth. Even technologies that the government helped to develop, such as the Internet, weren't profitable until the private sector made them into something that was usable and beneficial to the general population.
This is the flaw in President Obama's philosophy, in my opinion. He labors under the assumption that government programs -- unemployment benefits, stimulus, green energy -- can spearhead strong economic when the government's function isn't generating wealth for society as a whole. Its function is maintaining a social safety net.
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Never. Too many incredibly stupid people here who are allowed to vote.
ScipioCowboy
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Over the past few years, the majority of our major economic initiatives have been designed to prop up failing or unproductive industries. This trend dates back before President Obama took office, and started with TARP under President Bush. It's a very costly list:
- TARP
- Fannie Mae and Freddie Mac Bailouts
- Auto bailouts
- Green energy programs
If you were so inclined, you could make an argument for putting the two rounds of quantitative easing on that list since they were huge sums of money designed to encourage lending that never materialized.
That's a whole lot of money and economic resources being shunted to industries that have either failed or are unprofitable and not producing wealth for the economy as a whole. It's no great wonder why economic growth has been so anemic and job growth has flat lined.
- TARP
- Fannie Mae and Freddie Mac Bailouts
- Auto bailouts
- Green energy programs
If you were so inclined, you could make an argument for putting the two rounds of quantitative easing on that list since they were huge sums of money designed to encourage lending that never materialized.
That's a whole lot of money and economic resources being shunted to industries that have either failed or are unprofitable and not producing wealth for the economy as a whole. It's no great wonder why economic growth has been so anemic and job growth has flat lined.