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(The Year 2012 In Review)
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|User Info||ADP: Weak; entered at 2012-05-31 18:37:55|
Registered: 2011-12-21 Juneau Alaska
Mannfm11, of course as productivity increases in the basic industries they can support more symbionts and outright parasites. The symbionts are good, and the parasites, like government and finance, aren't too bad until they begin to strangle the basic industries that support them.|
My point wasn't that we are above the optimal level of services in our economy (although we are, if you count government), or that services don't belong in an economy (they do), my point was that we are definitely going to get poorer as we abandon agriculture, mining and manufacturing. We are abandoning our basic industries to satisfy the twisted fantasies of parasitic eco-nazis and nanny state control freaks. If we don't turn that around soon, we will all be paddling our rafts to Cuba for economic opportunity.
Reading your response, it looks as if you have far more faith in the Keynesians than I do. Investing in public works crowds out private investment in favor of politically driven investment. We can hope that the public investment isn't a net loss, but it's always going to be less productive than an investment that someone would undertake with his own money. Often, public investment winds up being a net loss. Look at stadium projects, or that bridge in Florida that Karl was railing about a while back.
Yes, public investment always crowds out private. It is obvious and dollar-for-dollar when there is no spare capacity, but the crowding out still happens when there is idle productive capacity. The public investment means higher taxes, higher debts and interest rates, or higher inflation, or all three, every time. All three of those consequences slow the economy, and mean less private investment.