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The United States government should follow his lead. Giving more grants and low interest loans to startups. The startups, the entrepreneurs, the risk takers,

by pj 18y ago

The United States government should follow his lead. Giving more grants and low interest loans to startups. The startups, the entrepreneurs, the risk takers, the pragmatists, the efficient and rational are what we need right now to pull us out of this mess. Instead the govt is giving all the money to the rich, inefficient, wealthy elite, who lied to get us into this mess in the first place. Give some money to those with vision. How much could we here on this list do with $700 Billion? The banks aren't doing anything with it... We just wasted it...

xenophanes 18y ago
The US Government isn't good at things like this. We don't need it expanding into new areas. Let the market handle it.
- JesseAldridge 18y ago
  "The US Government isn't good at things like this." Why not? Can we make it better?
  - deleted 18y ago
    [deleted]
  - jacoblyles 18y ago
    The knowledge needed to operate successfully in a market is widely dispersed: http://www.econlib.org/library/Essays/hykKnw1.html http://www.econlib.org/library/Essays/hykKnw1.html This problem seems non-fixable. Also, in modern states power is separated from accountability, so rational decisions are not incentivized: http://unqualified-reservations.blogspot.com/2007/07/why-when-and-how-to-abolish-united.html http://unqualified-reservations.blogspot.com/2007/07/why-whe... This is hard to fix, but maybe slightly more possible. In general, these are hard problems.
    - JesseAldridge 18y ago
      The first link seems to be an argument against planned economies. I think pj was suggesting something much more modest - something along the lines of a government run version of YCombinator. It seems to me that a group of experts giving many small grants or loans to a wide variety of startups would be a very good idea. (It seems to be working pretty well for pg et al.)
      - pj 18y ago
        That's exactly what I am suggesting. See, VCs, angels et al are investing their money or other people's money for the sole purpose of turning it into more money. A government run investment firm can have a much broader view of success than simply 10x returns on capital investment. Roads, bridges, and dams themselves for example are not profitable, but they enable a more productive society. The benefits of parks, museums, etc are largely unquantifiable, yet there is a perceived benefit. A public wireless cloud infrastructure for example would enable synchronization of traffic along major corridors, reducing exhaust, fuel consumption, and time delays. It may not produce a profit, but it will improve our entire economy. We could automate 50,000 miles of rail roads, 20,000 miles of interstate. That would do a lot for our economy and our productivity. A project like that though, is probably much bigger than any VC firm or group of angels. Also, we don't really /want/ competition to build something like that, we want collaboration. Private capital is competitive. How do we get everyone working together on benevolent projects that may not turn a big profit directly, but could enable social profit for the whole?
        deleted 18y ago
        [deleted]
        deleted 18y ago
        [deleted]
        jacoblyles 18y ago
        Another famous argument by Mises is that it is hard to figure out what is a socially profitable investment in absence of market prices. You pretty much just have to close your eyes and guess. The government currently doesn't justify each of the thousands of projects it has in such a manner. I'm assuming we want the benefit of each project to be greater than the cost. The bigger the program, the more unlikely that is to be the case. The critiques of the planned economy are applicable here.
  - xenophanes 18y ago
    The Government should do things when it's not going to happen otherwise. Like the military. Or arguably providing free health care to everyone. But when the Government isn't needed, then it shouldn't be used. Think how inefficient Microsoft is. Then realize Microsoft isn't actually very bad as big companies go. Well, the Government is an order of magnitude worse than the most inefficient huge companies. The Government is bigger, has more layers of management, rules, and paperwork, doesn't have to worry as much about making a profit, and there's less accountability and responsibility for decisions. If a normal company messes up, it pays for the mistake; if the Government messes up, the tax payer pays. Those are bad traits that should be avoided when we can.
    - pj 18y ago
      Well, the Government is an order of magnitude worse than the most inefficient huge companies. The Social Security System is one of the tightest ships in the world. You can't even get index funds with lower management fees in the private sector, because profit wants to be made and should be made.
      - xenophanes 18y ago
        You're holding up social security as the pinnacle of efficiency, without a citation? http://en.wikipedia.org/wiki/United_States_public_debt http://en.wikipedia.org/wiki/United_States_public_debt The link says social security is short 7 trillion dollars of 2008 money to pay for its obligations over the next 75 years. 7 trillion dollars is a lot of money... Whatever the reason this happened, doesn't it indicate the less Government the better, to lower the risk of them losing trillions of dollars?
        pj 18y ago
        I'm sorry, it was a bad idea to bring up Social Security. My only point was that the management of the legal requirements for the organization are very very small relative to the amount of funds that are flowing in and out. I do agree that there are fundamental flaws in the Social Security System and I have said many times, though not here, that I will gladly pay into social security and never receive any benefits. I don't see any other solution and I am volunteering to take the hardship. If enough people join me, we can fix social security. Like a balloon that slowly deflates through controlled exhaustion...
  - greendestiny 18y ago
    Governments aren't good at things like this, but I don't agree with the generally proposed reasons. I think governments simply can't operate with enough discretion, and when they do operate they are trying to achieve some political end, rather than a profit. I think governments can be quite efficient at achieving their goals, its just that the goals of politicians and bureaucrats are not aligned with the market.
reitzensteinm 18y ago
The thing is, even if you believed that the government would do a reasonable job of investing, the money is either going to come from issuing bonds (increasing the supply of attractive low risk investments and proportionally decreasing the attractiveness of high risk investments which cause growth), or they're going to already have it from taxation, much of which has come from money that would have been invested anyway. While I'm certainly more in favour of the government giving e.g. entrepreneural low interest loans than bank bailouts, I can't help but think that the money would have been better spent had it never been removed from circulation in the first place. How about getting entirely rid of tax on businesses until they issue dividends? So the money only gets taxed when it's withdrawn as profit (and this itself is only necessary to tax foreign investors). Businesses are on average quite profitable, so why take away money that they're planning to reinvest? It will almost certainly be reinvested wisely (because they were already profitable, they presumably know what they're doing).
- pj 18y ago
  Taxing /only/ dividends is not a bad idea. It will prevent the kind of CEO salary run up we have seen in the past few decades as well.
  - anamax 18y ago
    No it won't. CEO salary is an expense. Dividends come after expenses. FWIW, CEO earnings exploded because of a restriction on CEO salary. If that's a surprise....
known 18y ago
I agree. If $700 Billion tax exemptions are given to start-ups they will create millions of jobs.

by pj 18y ago

xenophanes 18y ago

The US Government isn't good at things like this. We don't need it expanding into new areas. Let the market handle it.

JesseAldridge 18y ago
"The US Government isn't good at things like this." Why not? Can we make it better?
- deleted 18y ago
  [deleted]
- jacoblyles 18y ago
  The knowledge needed to operate successfully in a market is widely dispersed: http://www.econlib.org/library/Essays/hykKnw1.html http://www.econlib.org/library/Essays/hykKnw1.html This problem seems non-fixable. Also, in modern states power is separated from accountability, so rational decisions are not incentivized: http://unqualified-reservations.blogspot.com/2007/07/why-when-and-how-to-abolish-united.html http://unqualified-reservations.blogspot.com/2007/07/why-whe... This is hard to fix, but maybe slightly more possible. In general, these are hard problems.
  - JesseAldridge 18y ago
    The first link seems to be an argument against planned economies. I think pj was suggesting something much more modest - something along the lines of a government run version of YCombinator. It seems to me that a group of experts giving many small grants or loans to a wide variety of startups would be a very good idea. (It seems to be working pretty well for pg et al.)
    - pj 18y ago
      That's exactly what I am suggesting. See, VCs, angels et al are investing their money or other people's money for the sole purpose of turning it into more money. A government run investment firm can have a much broader view of success than simply 10x returns on capital investment. Roads, bridges, and dams themselves for example are not profitable, but they enable a more productive society. The benefits of parks, museums, etc are largely unquantifiable, yet there is a perceived benefit. A public wireless cloud infrastructure for example would enable synchronization of traffic along major corridors, reducing exhaust, fuel consumption, and time delays. It may not produce a profit, but it will improve our entire economy. We could automate 50,000 miles of rail roads, 20,000 miles of interstate. That would do a lot for our economy and our productivity. A project like that though, is probably much bigger than any VC firm or group of angels. Also, we don't really /want/ competition to build something like that, we want collaboration. Private capital is competitive. How do we get everyone working together on benevolent projects that may not turn a big profit directly, but could enable social profit for the whole?
      - deleted 18y ago
        [deleted]
      - deleted 18y ago
        [deleted]
      - jacoblyles 18y ago
        Another famous argument by Mises is that it is hard to figure out what is a socially profitable investment in absence of market prices. You pretty much just have to close your eyes and guess. The government currently doesn't justify each of the thousands of projects it has in such a manner. I'm assuming we want the benefit of each project to be greater than the cost. The bigger the program, the more unlikely that is to be the case. The critiques of the planned economy are applicable here.
- xenophanes 18y ago
  The Government should do things when it's not going to happen otherwise. Like the military. Or arguably providing free health care to everyone. But when the Government isn't needed, then it shouldn't be used. Think how inefficient Microsoft is. Then realize Microsoft isn't actually very bad as big companies go. Well, the Government is an order of magnitude worse than the most inefficient huge companies. The Government is bigger, has more layers of management, rules, and paperwork, doesn't have to worry as much about making a profit, and there's less accountability and responsibility for decisions. If a normal company messes up, it pays for the mistake; if the Government messes up, the tax payer pays. Those are bad traits that should be avoided when we can.
  - pj 18y ago
    Well, the Government is an order of magnitude worse than the most inefficient huge companies. The Social Security System is one of the tightest ships in the world. You can't even get index funds with lower management fees in the private sector, because profit wants to be made and should be made.
    - xenophanes 18y ago
      You're holding up social security as the pinnacle of efficiency, without a citation? http://en.wikipedia.org/wiki/United_States_public_debt http://en.wikipedia.org/wiki/United_States_public_debt The link says social security is short 7 trillion dollars of 2008 money to pay for its obligations over the next 75 years. 7 trillion dollars is a lot of money... Whatever the reason this happened, doesn't it indicate the less Government the better, to lower the risk of them losing trillions of dollars?
      - pj 18y ago
        I'm sorry, it was a bad idea to bring up Social Security. My only point was that the management of the legal requirements for the organization are very very small relative to the amount of funds that are flowing in and out. I do agree that there are fundamental flaws in the Social Security System and I have said many times, though not here, that I will gladly pay into social security and never receive any benefits. I don't see any other solution and I am volunteering to take the hardship. If enough people join me, we can fix social security. Like a balloon that slowly deflates through controlled exhaustion...
- greendestiny 18y ago
  Governments aren't good at things like this, but I don't agree with the generally proposed reasons. I think governments simply can't operate with enough discretion, and when they do operate they are trying to achieve some political end, rather than a profit. I think governments can be quite efficient at achieving their goals, its just that the goals of politicians and bureaucrats are not aligned with the market.

reitzensteinm 18y ago

The thing is, even if you believed that the government would do a reasonable job of investing, the money is either going to come from issuing bonds (increasing the supply of attractive low risk investments and proportionally decreasing the attractiveness of high risk investments which cause growth), or they're going to already have it from taxation, much of which has come from money that would have been invested anyway. While I'm certainly more in favour of the government giving e.g. entrepreneural low interest loans than bank bailouts, I can't help but think that the money would have been better spent had it never been removed from circulation in the first place. How about getting entirely rid of tax on businesses until they issue dividends? So the money only gets taxed when it's withdrawn as profit (and this itself is only necessary to tax foreign investors). Businesses are on average quite profitable, so why take away money that they're planning to reinvest? It will almost certainly be reinvested wisely (because they were already profitable, they presumably know what they're doing).

pj 18y ago
Taxing /only/ dividends is not a bad idea. It will prevent the kind of CEO salary run up we have seen in the past few decades as well.
- anamax 18y ago
  No it won't. CEO salary is an expense. Dividends come after expenses. FWIW, CEO earnings exploded because of a restriction on CEO salary. If that's a surprise....

known 18y ago

I agree. If $700 Billion tax exemptions are given to start-ups they will create millions of jobs.