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To: Sherman Logan
Beg to differ. Not all government spending is inefficient or counter-productive. Neither does all private spending generate new wealth.

Government spending transfers wealth - period. Private spending is a result of wealth creation.

27 posted on 06/21/2011 11:40:16 AM PDT by NY.SS-Bar9
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To: NY.SS-Bar9
Government spending transfers wealth - period.

Untrue.

Some government spending creates new wealth. For example, the interstate highway system greatly reduced the cost of movement of people and goods. This created new wealth. You'd be perfectly happy to say that an equivalent improvement in mobility by private actors created wealth. Why not by the government?

Not everything the government does is transfer payments. Some is a necessary expense, without which all other wealth would quickly vanish, or at least the creation of new wealth. LEO and the military, for example. Without them and the legal system there would be no infrastructure within which new wealth consistently be generated. It's a necessary overhead expense.

Is government spending normally a much less efficient way to generate wealth? Absolutely. Is it possible for a command and control economy to generate wealth anywhere nearly as efficiently as a more or less free economy? Of course not.

But even the most repressive economies often generate some "stuff," which you may or may not be willing to define as "wealth."

For example, in 1920 the USSR was devastated. Even the military was pretty thoroughly destroyed.

By 1939, at enormous cost and great suffering, Stalin and his buddies had created an economy and military strong enough to (eventually) defeat the Germans. In 1920 this would not have been even conceivable. So obviously the Soviets had created new "stuff."

Inefficiently and with great atrocities, but they still brought new stuff into existence. The USSR managed to stay in competition with the USA through the 80s. Obviously this would not have been possible had they never created any new wealth.

If you wish to discuss the point further, I'm your huckleberry. But first you'll have to define what you mean by "creating wealth."

38 posted on 06/21/2011 12:12:54 PM PDT by Sherman Logan
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To: NY.SS-Bar9

An excellent essay on creation of wealth by private versus public sectors.

http://www.edlotterman.com/RWE/Articles/20070503.htm


42 posted on 06/21/2011 12:18:50 PM PDT by Sherman Logan
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