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The Tesla Berlin car factory alone costs 4 billion euros. A large part of this sum is going to local construction companies. So in some sense, they already paid
by ChemSpider 5y ago
The Tesla Berlin car factory alone costs 4 billion euros. A large part of this sum is going to local construction companies. So in some sense, they already paid for it.
- qeternity 5y agoWhat? That’s not how this works. If the government gives me €1B and I go buy gold with it, just because I’ve spent it locally does not make it a productive use of proceeds.
- epistasis 5y agoThat's because you bought gold rather than purchasing productive aspects of the economy, which goes back to labor. Buying up stores of wealth instead of purchasing services is a very bad way to stimulate the economy.
- qeternity 5y agoYou’ve missed the point entirely, as that is precisely my point. Merely hand waving it away and saying “it was spent on local construction companies” is not a sufficient argument. It takes a hell of a lot to justify these sorts of investments and usually the ROI doesn’t materialize for the State.
- nickflood 5y agoWhat the other person meant, I think, is that when you buy services from the companies, those companies then pay a 20% tax on profit to the state, additionally, all the salaries they pay to people also end up ta ed at 30-40%, so much of the labor cost will be returned to the state and only raw materials won't (but if they are sourced locally, the suppliers will also contribute some taxes). Don't know the exact division between labor and materials, but my armchair guess would be that 20% of the cost of factory will end up as tax paid to the state.
- laingc 5y agoI think GP is prefectly well aware of what was meant, and their point still stands - you need to do a lot of careful analysis to actually claim any ROI for these kinds of government handouts, and the burden of proof is very firmly on those claiming the benefits. The history of these things is overwhelmingly that in the final tally, actual benefits fall far short of break even.
- ImprobableTruth 5y agoI don't feel comfortable with people just claiming that there's a positive ROI, but I feel the same about claiming "usually the ROI doesn’t materialize for the State" without anything to back it up. >The history of these things is overwhelmingly that in the final tally, actual benefits fall far short of break even. Do you have some source for this?
- qeternity 5y agoI know what they meant. That doesn’t mean you can just argue a point without any sort of justification.
- deleted 5y ago[deleted]
- ch_sm 5y agoTo expand on your point, the "ROI" for a state doesn’t have to be strictly financial. It can invest to improve employment rate, to establish itself as a production/business hub, etc.
- qeternity 5y agoNo. All of those things can and must be translated into ROI. This is the only way to compare investments. Maybe there’s a different use of these funds that would yield greater impacts in those areas you mention.
- ch_sm 5y agoI understand your point. But: fiscal balance is merely one of many goals a state has when it invests. There are also environmental concerns, questions of social equality and wellbeing. In other words: a state is not (only) a business. Not everything shows up on the balance sheet.
- qeternity 5y agoNo, you don’t. I’m saying all of those things have return functions. Financial ROI is just one metric. However you define your environmental returns, you can calculate an environmental ROI and then compare that across projects.
- belltaco 5y agoUnfortunately the track record of government spending is pretty bad. I'd rather have that money go towards private entities with good a track record, to find solutions to things like the climate crisis and pollution.