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Government is the least efficient allocator of resources. For every dollar put to use, many more dollars are wasted due to incompetence or fraud. California's

• ballstothewalls 14y ago
  Government is the least efficient allocator of resources? Says who? How many wealthy individuals are sitting on piles of money right now because they are unsure of the economic climate and therefore are not going to invest? Who better than the government to take it away from them and then invest it into public infrastructure and consequently stimulate the economy?
  • nhangen 14y ago
    What gives the government the right to 'take it away from them?'
    • mitchty 14y ago
      They have the guns normally. Force tends to be its own right. That said, Californians complaining about government isn't surprising, they have the worst possible state government of the union. Their bias is understandable, but entirely their own doing.
      • nhangen 14y ago
        "Potentially, a government is the most dangerous threat to man's rights: it holds a legal monopoly on the use of physical force against legally disarmed victims."
        • forensic 14y ago
          Like everything Ayn Rand, that's completely upside down, since government is also the only entity that has ever succeeded in guaranteeing people's rights. So government is the best friend of man's rights, while libertarianism is the biggest enemy. Libertarianism = corporate feudalism.
      • charonn0 14y ago
        they have the worst possible state government of the union Must be all the rich people that live here; they ruin everything!
        • mitchty 14y ago
          I was referring more to their referendum system.
          • charonn0 14y ago
            Which diminishes my point not a bit.
            • mitchty 14y ago
              Well I wasn't exactly caring about the people behind the referendum, but true enough.
    • swerling 14y ago
      That would be the sixteenth amendment to The Constitution of the United States of America.
    • hackinthebochs 14y ago
      What is "property" other than a state-enforced claim to ownership? If the state (read: society) decides to take some back it is well within its "right" to do so, as your only claim to property is based on decree of society.
      • gwright 14y ago
        I'm guessing your not a big John Locke fan.
        • hackinthebochs 14y ago
          I am a fan actually, and I don't think my views are incompatible with his. I do have reservations of the typical use of "natural law" arguments though. One can construct a natural law argument for just about any premise one wants.
          • gwright 14y ago
            > I am a fan actually, and I don't think my views are incompatible with his. I'm unable to reconcile your comment with what I understand to be John Lock's theory regarding property rights. They seem incompatible to me.
            • hackinthebochs 14y ago
              My recollection of his work is nothing but vague memories at this point, so there's a good chance I'm completely off in my assessment.
  • skibob1027 14y ago
    Wealthy people don't "sit on piles of money". That money is either held in a bank or invested. If it's in a bank, it is able to be loaned out to others looking for access to capital now. If its invested, it's being used as capital in a business (assuming it's and equity investment).
    • ams6110 14y ago
      None of these things happen if the government takes it instead.
    • rdl 14y ago
      Banks don't really loan out money these days, either -- they generally have been keeping it on deposit with the fed, or in government securities, rather than making commercial loans. And, banks are a lot less efficient at deploying capital than enterprises internally, or private investors, even in good times.
  • tsotha 14y ago
    >How many wealthy individuals are sitting on piles of money right now because they are unsure of the economic climate and therefore are not going to invest? So what? It's their money.
  • rpm4321 14y ago
    Why do you think they are sitting on these piles of money rather than investing it? It's because of the incessant sabre-rattling from the left over the past six years about raising taxes and ramping up even more regulation. It has a chilling effect.
    • forensic 14y ago
      you know what's chilly? the blade of the guillotine. you can either share some of your money or lose all of it.
      • hackinthebochs 14y ago
        It's funny how quickly people forget. There is one inevitable end result of such severe disproportionate concentrations of wealth. I'm sure we're nowhere near that point yet, but those who argue against redistribution are guaranteeing we will get there at some point.
        • brg 14y ago
          I take you to mean that people forget that this is the inevitable outcome, but is there proof of that? China and ancient egypt for extremely stable examples of societies with hugely disproproriate distribution of wealth. Is it possible that revolutionary France and Russia are the outliers of history?
      • rpm4321 14y ago
        I really wish that I had joined HN more than a month ago, just so that I could downvote you. This belongs on Reddit or Huffpo, not HN. Ironically, it's this sort of OWS mullarkey that's helping to prolong the environment of economic uncertainty that's hurting us so badly today.
        • forensic 14y ago
          I joined HN four years ago. How would YOU know what belongs on HN? Your comment is extremely shallow and false to boot. It belongs on Rush Limbaugh, not on HN.
  • nugget 14y ago
    It's very difficult to be "sitting on piles of money" in the way you imply unless you've literally perched yourself atop a chair constructed from stacks of US dollar bills. When a millionaire earns an extra million dollars, he or she puts it somewhere - into stocks, or bonds, or other investments, and sometimes, rarely, keeps it in a bank account for years on end where it sits and earns no interest. With the exception of the bank account, all of these are capital re-investments that stimulate the economy in some way.
    • meric 14y ago
      Money stored into bank accounts are re-invested into property and construction, which is a type of capital-reinvestment.
  • prostoalex 14y ago
    Oh right, investing in infrastructure == stimulus for the economy. http://www.slate.com/articles/business/project_syndicate/2011/04/beijings_empty_bullet_trains.html http://www.slate.com/articles/business/project_syndicate/201...
• silvestrov 14y ago
  That has nothing to do with the article. No matter how inefficient the government is, they still need money. And the article is about who pays how big part of that money.
• Retric 14y ago
  'Entrepreneurs' are terrible at allocating capital. Just compare the ROI from venture capital funds vs the S&P 500 over the last 20 years to get some idea. And no the vast majority of CEO's of a fortune 500 company are not Entrepreneurs for any reasonable definition of the term. PS: It's important to include failures and opportunity costs when you talk about Entrepreneurs or your basically saying lottery winners are great at allocating capital.
• nhangen 14y ago
  I'm with you. Until the federal gov can prove it is willing to even attempt a balanced budget, is willing to stop giving handouts (to both the wealthy and the lazy), and proves it will actually invest in something other than bad cars and banks, then there's no reason they should get anything more than they already do. If you keep feeding a monster, all you get is a bigger monster.
  • ghouse 14y ago
    Your argument assumes that people making spending decisions care about the debt. 30 years of government run by both sides of the aisle demonstrate that revenue and expenditures are entirely decoupled. Whether you feed or don't feed the monster doesn't impact the monster's size. If you stop funding government, all you get is a larger debt.
• brianchu 14y ago
  Where did you get the idea that "the many billions raised for 'education' went entirely to shore up the teacher's bloated pensions and benefits fund?" (emphasis added) As far as I'm aware, the majority of the money went to prevent spending cuts in education budgets, and the rest went into the general budget (http://voterguide.sos.ca.gov/propositions/30/analysis.htm http://voterguide.sos.ca.gov/propositions/30/analysis.htm). Hyperbole is not necessary to make your point.
  • gwright 14y ago
    It is a mistake to try to analyze spending in this way. Dollars are fungible. Dollars directed to one particular budget item (education budgets in your example) simply frees up other dollars to be used elsewhere (pensions and benefits in the parent comment).
• tsotha 14y ago
  >For every dollar put to use, many more dollars are wasted due to incompetence or fraud. California's Proposition 30 was a wake-up call for me... You needed a wake-up call after the shenanigans we've seen in Sacramento over the last decade? They won't even spend the extra money. They'll use it as leverage to issue bonds. Tax increases in California have become mere guarantees taxes will be raised yet further at some future date.
• alwaysdoit 14y ago
  >Government is the least efficient allocator of resources. This is baseless dogma. Government may not always be the most efficient allocator, but it's not always the least efficient either. In cases of positive and negative externalities, the market does not allocate ideally. We need to move past this dogma of "All government is bad government" so that we can separate the good from the bad. Good rules are helpful. Bad rules are harmful. When we have low expectations of our government, we will unsurprisingly have low outcomes.
  • ruby_on_rails 14y ago
    I think what nugget is getting at, is there are many government programs that are mismanaged (welfare, social security, education to some extent, and others). Who legitimately feels good that they pay taxes only to see other Americans living off of Welfare, generations unemployed, living off of welfare (which btw, I consider to be fraud). People that live on welfare (no, not people who use the program as it was intended, as temporary help), don't pay taxes and the benefit from those of us that do pay taxes. When confronted with situations like the one described above, any rational person would wonder why we want higher taxes, when we should really be focusing on reforming our broken social programs. Only then, when we take legitimate steps to reform our broken social programs, should we be considering higher taxes.
    • rayiner 14y ago
      Broken by what measure? Relative to what? Is the government mismanaged compared to say Google? The federal agency I worked for was a much tighter-run ship than the startup I worked for, or the medium-sized tech company I worked for. I'd wager the federal government, or at least most of it, is better-run than most small and medium sized businesses in the US. The caliber of people in most of the agencies is just extremely high compared to what you usually see at all but the top private sector companies.
      • rdl 14y ago
        Many areas of the federal government are actually pretty good by commercial standards (at least for caliber of employee), but most state governments are by comparison pretty horrible (particularly California). However, they're much more concerned with fairness and being abused by third parties, since they aren't as constrained to succeed or die. It is better for an employee of a government entity to follow process 100% correctly and ultimately fail than to take a calculated risk outside of normal process and fail, even if the expected return on the riskier path is far higher, or odds of failure lower. Startups are exactly the opposite, since they die by default. Big businesses are somewhere in between -- a new product failing usually won't kill the business if it fails cleanly, but could if enough corners are cut. The ultimate difference between private firms and government is that a private firm which is seriously screwed up will go out of business. A government agency can continue being dysfunctional for a long time (e.g. the Office of Thrift Supervision). The other big difference is that when a government entity is incompetent, it tends to hurt others a lot more than when a single commercial firm is incompetent.
• forensic 14y ago
  Entrepreneurs only work for human beings with money. Who works for those without? It doesn't matter how inefficient government is. Government is the only entity that works for the disadvantaged. Government is also the only entity capable of addressing collective problems.
  • prostoalex 14y ago
    > Government is the only entity that works for the interest of the disadvantaged. oh rly? http://www.nps.gov/partnerships/fundraising_individuals_statistics.htm http://www.nps.gov/partnerships/fundraising_individuals_stat...
    • forensic 14y ago
      If you think private charity works for the disadvantaged, you are confusing the customer with the product.
      • prostoalex 14y ago
        Mmm, can you elaborate? Like Red Cross or local church's soup kitchen, how does their activity not benefit the disadvantaged?
        • forensic 14y ago
          Maybe some private charities do benefit the disadvantaged. But that doesn't mean those private charities work for the disadvantaged. Who is the customer of a private charity? Who is the product of a private charity?
  • gyardley 14y ago
    You can't possibly actually believe this. When I'm doing volunteer work, I'm working for the interest of the disadvantaged. My synagogue collectively works for the interest of the disadvantaged through their social action programs. My town's interfaith food bank is run very well and addresses a collective problem without taking a dime of government support. Government plays a role in helping the disadvantaged but it doesn't play the only role, it's not necessarily the most effective role, and since it involves taking money from people involuntarily, we should make damn sure the help's truly necessary and there's not a better, voluntary way to do it first.
• ianb 14y ago
  This response has become the standard (non sequitur) response to proposals for progressive taxation, but it doesn't engage at all with the argument being made. The degree to which taxes are progressive doesn't determine the total tax collected, or the amount the government expends, it determines how that burden is applied to people. What we should really be comparing is: does an individual allocate their first $100,000 of income with any different efficiency than their second, third, or fifteenth $100k of income? If you give $1000 to a person who makes $50,000 a year, and $1000 to someone who makes $1,000,000 a year, who will allocate that money better? I think most of us would feel intuitively that the person making $50,000 would use it "better", but there's fair arguments to the contrary as well (including figuring out what "better" means). But only when you ask that question are you asking about progressive taxation, not just tax burden as a whole.
  • gwright 14y ago
    Why are you framing the argument as if incomes are something that are owned by the government instead of the person who earned the money? The notion that taxation should be predicated on whether the government or the person can 'better use' the person's money is damn scary.
    • cdash 14y ago
      Its not really scary at all because that is what governments have always done, unless you are an advocate for no government at all in which case you are damn scary.
      • gwright 14y ago
        That is a false dichotomy. You want me to choose between anarchy or <insert your form of government here> where you've asserted that it doesn't matter what form of government I choose because they are all the same.
    • ianb 14y ago
      The whole point of my post is that progressive taxation is a question of which individuals pay what, not whether money stays with individuals or goes to the government. You appear to be caught up in the framing of political rhetoric.
• mcantelon 14y ago
  >Entrepreneurs are some of the most efficient allocators, because they are decision makers with a vested interest in the outcome. Not if they're burning through someone else's money. Then it's as big a shitshow as government.
• chasing 14y ago
  "Entrepreneurs are some of the most efficient allocators, because they are decision makers with a vested interest in the outcome. This concept is so rare as to practically not exist in the public sector." What a shitty, smug attitude to have towards the many very bright and motivated people who work in the public sector. They're not all perfect, but neither are all entrepreneurs. Not by a long shot.
  • nugget 14y ago
    I didn't say that folks in the public sector are lazy or stupid, I said that there is rarely a direct connection between their performance on the job and their financial upside. Public sector workers are much more concerned about downside protection (i.e. avoid controversial decisions, cover your ass). In many cases, and I've seen this first hand, inaction is safer than action, whereas the opposite is usually true in business and especially in startups.
    • chasing 14y ago
      You're right -- I've never seen anyone in the private sector avoid controversial decisions or cover their ass. We should hand over all our nation's money to Bill Nguyen.
• deleted 14y ago
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