Re: public spending

Michael Lorrey (
Thu, 09 Oct 1997 19:07:13 -0400

Anton Sherwood wrote:
> M.Lorrey scripsit:
> : Sorry, I thought a list of historical precedent would be sufficient
> : argument. Ok, maybe not. How about this: Can any socialist in the
> : audience please tell me why they think government spends money better
> : than private industry, when public debt must be given tax exempt status
> : in order to attract sufficient investment to purchase that debt, while
> : stocks in private corporations, the largest 40 of which have an average
> : annual growth rate twice that of the rate of return on public debt
> : instruments. If government was so much better, then Government bonds
> : would give a higher rate of return without tax exempt status.
> :
> : I think the rate of return on investment is possibly the best yardstick
> : one can measure the relative performance of public vs. private sectors.
> Good grief, Michael, any fool can tell you that earning money
> isn't what the gummint is for. Where's the return on investment
> in public goods? Nowhere, because the provider of public goods
> doesn't *get paid* ! That's *why* (in theory) we pay taxes, to
> fund such things!
> Now maybe you mean that if the state spends wisely, the economy
> will grow, and tax revenues will grow. If that's what you meant,
> do say it more explicitly, because I almost missed it.

Sorry. I thought that it was implicit that since governments do not
operate on a profit/loss basis, the quality/productivity motive is not
there, but that is neither here nor there. I was assuming two possible
scenarios: a) where government is socialist and runs nationalized
companies, which require capital investements to modernize, expand, etc.
just like any business, and b) where government is more laissez faire,
private businesses are competing in the market with nationalized company
A, and compete in the money markets for investment capital. In this
situation, the nationalized company issues government backed tax free
bonds, while private company B simply issues stock, capital gains on
which is taxed. If socialized government business was so much better,
then obviously it would be able to provide a higher rate of return on
invenstment to purchasers of its bonds, without having to offer tax-free
status to the gains. Since not socialized companies have ever done this,
then this is an obvious financial yardstick to show that private
business is more successful than private business.

We don't even need to look at different countries. We can simply look at
a comparison between the United States Postal Service and companies like
UPS, FedEx, Airborne, etc.

This case study is also a good comparison to show that labor also does
better under private enterprise than government socialism. UPS has the
highest wages for almost all of its regular part and full time
positions, while the USPS's jobs rank in the lower half, in a comparison
of employees in the postal/parcel delivery industries. This was BEFORE
the latest strike. WOrkers at the post office can't go on strike due to
government regulations. Hmmmm, what seems to be wrong here?
> : In terms of how well consumers are treated by product or service
> : providers, perhaps we can use yardsticks like:
> : a) what is the relative accident rate in automobiles between the US and
> : former Soviet Union (in accidents/fatalities per vehicle)?
> [etc]
> That's better.
> : Some other questions to ask:
> :
> : How many people have been shot and killed in their beds
> : by hit squads hired by the mom and pop store down the street
> : (including New York City, I'll be daring)?
> Hm, there ought to be a story in that. Perhaps a black-comic
> movie, in the vein of "No Way To Treat A Lady".

I'll bet even including organized crime hits (mafioso), the government
law enforcement agencies still kills far more law abiding citizens than
by private organizations. Criminals tend to kill other criminals,
especially when it is concerning any type of organized crime. Cops don't
seem to care who they shoot, so long as they aren't be shot back at.

			Michael Lorrey
------------------------------------------------------------	Inventor of the Lorrey Drive
MikeySoft: Graphic Design/Animation/Publishing/Engineering
How many fnords did you see before breakfast today?