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Governments are notoriously bad at investments. Rich people will not keep money frozen in offshore accounts forever, to be eaten by inflation. They will invest

Governments are notoriously bad at investments. Rich people will not keep money frozen in offshore accounts forever, to be eaten by inflation. They will invest at some point, and when they do it's going to be much more efficient than whatever the government can do. All the former communist states had the government make all the decisions where the money is invested, and they fell further and further behind in economy. They even had long term plans - 5 years, much better in theory than the quarter to quarter sprints that modern companies have, and it still didn't help. You could say that once in offshore accounts, money will maybe be invested in other countries rather than domestically. That might be true, but that is a different problem (globalism) rather than trickle down. There is a picture of Elon Musk on the article. Do you really think a government would have ever been able to create Tesla?

api 5y ago
I'm not sure everyone here is arguing that the government should make investments. Many are arguing that the poor and middle class must be capitalized to increase demand and that an economy with nothing but rich people trading vanity goods with each other is a recipe for stagnation and societal collapse. There should not be a picture of Elon on the article. That speaks to ignorance. Elon gets a lot of flak because he's highly visible but he's nowhere near a poster child for the idle rich. The idle rich who sit and extract rent know to keep out of the limelight.
sofixa 5y ago
> Governments are notoriously bad at investments Not all governments, check Norway for a great example of great investment.
- flavius29663 5y ago
  Didn't Norway just bought into the stock market via their pension fund? That is literally the opposite of investing it themselves. They take the largest part of the money and put it on the market, believing that the private companies can grow those money better than they can. And they were right...
  - nouveaux 5y ago
    "Didn't Norway just bought into the stock market via their pension fund? That is literally the opposite of investing it themselves." A pension fund is payment to a group of people over a period of time. Traditional investment from a government into a country comes in the form of building infrastructure and military. Dollars spent on infrastructure and the military will not pay yearly cash dividends. A factory can take it's payroll budget and "invest" it on machines, but it will not be able to pay it's employees, which defeats the purpose of a payroll budget. Norway has a yearly budget and it invests in traditional things like infrastructure and their military. This is what the GP means when they say that governments can make good investments. [1] [1] https://en.wikipedia.org/wiki/State_budget_of_Norway https://en.wikipedia.org/wiki/State_budget_of_Norway
    - flavius29663 5y ago
      Doing a quick lookup over the budget of Norway, it seems like they invest directly about 4 billion USD each year (this is for year 2007, but it can't be be wildly different today). Compare that to the government letting the pension fund invest 1400 billions on the open market. https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor... I would say even the government of Norway recognized that the free economy will do better with the money that they can (and how right they were!)
      - nouveaux 5y ago
        I don't get it. Can you explain to me what the ROI would be if the pension fund invested their money into public infrastructure?
        flavius29663 5y ago
        Not sure how to calculate ROI on infrastructure. There is a limited amount of infrastructure a country needs, once that is built the government can decide to keep pumping money into the economy (say state operated oil machinery factories, armament factories, furniture factories etc.) or they can do what the Norway government did and just dump the money in the stock market, letting the market decide what works and what doesn't.

api 5y ago

I'm not sure everyone here is arguing that the government should make investments. Many are arguing that the poor and middle class must be capitalized to increase demand and that an economy with nothing but rich people trading vanity goods with each other is a recipe for stagnation and societal collapse. There should not be a picture of Elon on the article. That speaks to ignorance. Elon gets a lot of flak because he's highly visible but he's nowhere near a poster child for the idle rich. The idle rich who sit and extract rent know to keep out of the limelight.

sofixa 5y ago

> Governments are notoriously bad at investments Not all governments, check Norway for a great example of great investment.

flavius29663 5y ago
Didn't Norway just bought into the stock market via their pension fund? That is literally the opposite of investing it themselves. They take the largest part of the money and put it on the market, believing that the private companies can grow those money better than they can. And they were right...
- nouveaux 5y ago
  "Didn't Norway just bought into the stock market via their pension fund? That is literally the opposite of investing it themselves." A pension fund is payment to a group of people over a period of time. Traditional investment from a government into a country comes in the form of building infrastructure and military. Dollars spent on infrastructure and the military will not pay yearly cash dividends. A factory can take it's payroll budget and "invest" it on machines, but it will not be able to pay it's employees, which defeats the purpose of a payroll budget. Norway has a yearly budget and it invests in traditional things like infrastructure and their military. This is what the GP means when they say that governments can make good investments. [1] [1] https://en.wikipedia.org/wiki/State_budget_of_Norway https://en.wikipedia.org/wiki/State_budget_of_Norway
  - flavius29663 5y ago
    Doing a quick lookup over the budget of Norway, it seems like they invest directly about 4 billion USD each year (this is for year 2007, but it can't be be wildly different today). Compare that to the government letting the pension fund invest 1400 billions on the open market. https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor... I would say even the government of Norway recognized that the free economy will do better with the money that they can (and how right they were!)
    - nouveaux 5y ago
      I don't get it. Can you explain to me what the ROI would be if the pension fund invested their money into public infrastructure?
      - flavius29663 5y ago
        Not sure how to calculate ROI on infrastructure. There is a limited amount of infrastructure a country needs, once that is built the government can decide to keep pumping money into the economy (say state operated oil machinery factories, armament factories, furniture factories etc.) or they can do what the Norway government did and just dump the money in the stock market, letting the market decide what works and what doesn't.