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The reason I suggest government funding is that unlike a private investor, the government can make a huge return on a business that simply breaks even, assuming
by steamer25 17y ago
The reason I suggest government funding is that unlike a private investor, the government can make a huge return on a business that simply breaks even, assuming all of the employees pay income taxes.
If government is funding the business, they're providing the payroll. E.g., If, I, as the government owe you $20 in payroll and you owe me $10 in taxes; my net is -$10. There is no huge return. I'll grant, however, that there is a potential for the government's constituents to be satisfied with merely breaking even.
Plus you have the ripple effect on vendors to the company, and the benefit of reducing unemployment.
Keynesian multipliers don't work. They are offset by the government taking money out of the private economy before they can put it into their make-work programs. E.g., Say I start a business under this plan called "Running for Fun". Sales at ShoeMart, SportsPlex and SpandexLand all go up. However, the lady that was taxed to pay for my program had a business called "Enviro-Maid". She would've spent that money with her vendors, Eco-Detergenze, RecycloScrubs and SolarVacs but now she can't. It's a zero-sum game.
If it did work, the government could hire one set of people to dig ditches and another to fill them in (it's a health program!). The problem is that no actual wealth or value is created although you might create some bureaucratic positions to keep track of the 'progress'.
If the government is involved, there are no insurance issues because a government can simply make it a law that you can't sue it.
This is actually a good idea. But instead of (literally) expanding the government into everybody's business let's extend that same protection against baseless claims to non-government entities.
Overall, I agree with Adam's general sentiment of utilizing 'net technologies to organize opportunities against underutilized skillsets. I'm just not sold on the government involvement--especially in education where programs like Khan's Academy and the concepts surrounding OCW are poised to overthrow the public indoctrination monopoly.