A Quote by Sheldon Richman
Government spending reduces the capital that could be invested to serve consumers and to produce new employment opportunities.
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As the prosperity of the nation and the height of wage rates depend on a continual increase in the capital invested in its plants, mines and farms, it is one of the foremost tasks of good government to remove all obstacles that hinder the accumulation and investment of new capital.
In almost every enterprise, government has provided business with opportunities for private gain at public expense. Government nurtures private capital accumulation through a process of subsidies, supports, and deficit spending and an increasingly inequitable tax system.
History does not provide any example of capital accumulation brought about by a government. As far as governments invested in the construction of roads, railroads, and other useful public works, the capital needed was provided by the savings of individual citizens and borrowed by the government.
Access to capital is important for all firms, but it's particularly vital for startups and young firms, which often lack a sufficient stream of earnings to increase employment and internally finance capital spending.
When government 'creates jobs' by taking money from the private sector and 'investing' in favored projects, it is not truly productive activity. Rather, the government has preempted the economic process, forbidding it to serve consumers so that it can instead serve the objectives of politicians and bureaucrats.
If old consumers were assumed to be passive, then new consumers are active. If old consumers were predictable and stayed where you told them, then new consumers are migratory, showing a declining loyalty to networks or media. If old consumers were isolated individuals, then new consumers are more socially connected. If the work of media consumers was once silent and invisible, then new consumers are now noisy and public.
When the Congress was in power, the educated - especially the engineers - were jobless and they could not even sell pakodas and the UPA government could not bestow attention. But Prime Minister Narendra Modi created employment opportunities for the educated youth.
The financial doctrines so zealously followed by American companies might help optimize capital when it is scarce. But capital is abundant. If we are to see our economy really grow, we need to encourage migratory capital to become productive capital - capital invested for the long-term in empowering innovations.
If you have a private firm and you spend a ton of money to pay employees, but what you produce is a flop, there will be no value to GDP. But government spending all gets counted as contributing to economic growth. That's why in the early days of creating these measurements, some people didn't want to count government spending.
Netflix, Amazon, iTunes - whatever platforms emerge - we are looking at as having the same potential that home video had for the movie business. Which means there are entirely new opportunities to monetize our capital investment in content and do so in ways that work for distributors, for consumers and for creators.
The standardization and specialization of industrialization was being undermined by globalization. When people in Bangladesh could produce things much more cheaply than anybody could produce them in Detroit, we no longer were the world capital of industrialization.
As the run-by-capital society of producers turned since into the run-by-capital society of consumers, I would say that the main, indeed "meta", function of the governments has become now to assure that it is the meetings between commodities and the consumers, and credit issuers and the borrowers, that regularly take place.
During the period of capital moving from one employment to another, the profits on that to which capital is flowing will be relatively high, but will continue so no longer than till the requisite capital is obtained.
Since taking office, President Obama has signed into law spending increases of nearly 25 percent for domestic government agencies - an 84 percent increase when you include the failed stimulus. All of this new government spending was sold as 'investment.'
We need to have a strong economy that can create employment opportunities and that can also produce the revenue that we need to defend our country at home and abroad.
The idea that full employment without property ownership will solve the world's problems is utter nonsense. The Keynesian concept that the function of capital is merely to amplify labor, not independently produce wealth is simply blindness.
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