No, it wouldn't, at least not in the timescale covered. The studies cover several decades, more than enough time for negative effects to occur if they ever will.
You miss the point. If the government spends enough money, even the worst depression could simply look rosy according to GDP, meaning the government that stops spending money (the right wing government) will be the one that "appears" to have suddenly screwed things up. You can slightly see this effect during the Great Depression, where increased government spending and new laws basically did jack all to stop the depression, but showed a GDP increase (similarly, during WW2 there was massive GDP growth, but that came from building tanks etc while the people were living off of ration tickets).
You can slightly see this effect during the Great Depression, where increased government spending and new laws basically did jack all to stop the depression, but showed a GDP increase (similarly, during WW2 there was massive GDP growth, but that came from building tanks etc while the people were living off of ration tickets)
That's a better example. However, the gain in GDP from the war was very temporary, and total factor productivity growth during the war was very poor, lowering GDP for years afterwards. Over the long term, there was not a net gain in GDP from the war.
Paying attention to where resources are going rather than just current aggregate GDP is important. However, unlike military spending, what I'm currently talking about (public investment and infrastructure spending) don't crowd out private spending or consumption by any means. Rather, these programs increase private consumption. And one can have the benefits of roads and libraries without ration cards or war.
Does public investment crowd out private investment? Yes or no?
This is a rather moot question, though, because, as NEPHiLiX eloquently pointed out, you've already (implicitly) conceded.
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
Voluntaryism Forum
what I'm currently talking about (public investment and infrastructure spending) don't crowd out private spending or consumption by any means.
mustang19:Paying attention to where resources are going rather than just current aggregate GDP is important. However, unlike military spending, what I'm currently talking about (public investment and infrastructure spending) don't crowd out private spending or consumption by any means. Rather, these programs increase private consumption. And one can have the benefits of roads and libraries without ration cards or war.
This is why I consider Keynesianism just another socialist free lunch scheme. They seem to think that somehow scarce resources can be used up by the government without being less available for other uses. Hence government spending created a free lunch out of thin air!
The question is, if the government can use those resources without opportunity costs, what would have happened to those resources in a free market? Since the government doesn't produce anything these resources must also exist, but they also have to be available for government projects without being taken away from other projects. We can only conclude that these resources would pile up somewhere in the absence of government coming in and spending them for us. So then, in a free market, there would be all those resources piling up that could be used for infrastructure, and there would be need for infrastructure to increase private consumption, but for some reason nobody would use one for the other.
The reality looks differently of course. All resources in the free market are put to their most efficient uses. If that is infrastructure, then the market will build infrastructure. When government comes in and uses up some resources, it necessarily takes them away from other uses, that the market would have deemed to be more useful. These infrastructure projects may increase private consumption, but whatever the market would have done with them would have increased private consumption even more.
According to the empirical evidence, usually not. If it did, that wouldn't necessarily mean public investment has a lower return than private investment.
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCUQFjAA&url=http%3A%2F%2Fwww.aestudies.com%2Flibrary%2Fcrowdout.pdf&ei=pbqaT_qaM5HG0AGJ-cSjDw&usg=AFQjCNGclYL356kCnZmH3w7XJ2EwnbeIYQ&sig2=tGW6iCPuFpEv1t4lt8SLhA
I haven't conceded any serious point thus far.
The reality looks differently of course. All resources in the free market are put to their most efficient uses.
That's not a fact. That's your conjecture, and it's not supported by the evidence provided.
mustang19:According to the empirical evidence, usually not. If it did, that wouldn't necessarily mean public investment has a lower return than private investment. http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCUQFjAA&url=http%3A%2F%2Fwww.aestudies.com%2Flibrary%2Fcrowdout.pdf&ei=pbqaT_qaM5HG0AGJ-cSjDw&usg=AFQjCNGclYL356kCnZmH3w7XJ2EwnbeIYQ&sig2=tGW6iCPuFpEv1t4lt8SLhA
Are you taking that single paper as constituting all of the empirical evidence obtained thus far? (Since there's never any limit to empirical evidence.)
mustang19:I haven't conceded any serious point thus far.
Ah, so now you're claiming that NEPHiLiX's point isn't "serious". Nice try. But why don't you go ahead and explain to us just how his point allegedly isn't "serious"?
Mustang19, because you continue to point to such papers, I can see that the lesson of Bastiat's parable of the broken window is still lost on you. Maybe I can explain this better:
Empirical economics would take the broken window as a given and ask whether it generates economic activity. After some period of time has elapsed, it would look at the economic record and conclude that, yes, the broken window did generate economic activity. In other words, it only takes into account what is seen, i.e. what is directly observed. It does not take into account what is not seen, i.e. what can't be directly observed but can nonetheless be logically inferred. Bastiat's whole point, then, is that empirical economics misses half of the picture.
I suppose the real question is: are you willing to accept that through public investment in infrastructure you necessarily destroy the possibility for a more efficient private investment of another kind?
Note that not all private investments work out. Trial and error is part of the market.
"What is there to fear?" is another way of putting it.
I am not willing to accept the destruction of more efficient investment. However, the studies cited find public investment returns much higher than private investment returns in most cases.
No. The papers cited cover recent American history.
mustang19:No. The papers cited cover recent American history.
So recent American history is necessarily the sum total of all empirical evidence in support of your position?
Nope. There's more.
Then why don't you bring it up?
mustang19:However, the studies cited find public investment returns much higher than private investment returns in most cases.
If you just believe that central planning is more efficient than markets, how do you explain that North Korea has less economic growth than South Korea?
But you can't measure something that hasn't happened.
And you can't disprove an event that already has.
For the umpteenth time, that's not the point. You're now arguing from an egregiously dishonest position.
What's not the point? That public investment has registered a return two or three times higher than public investment for decades, and continues to do so? Alright, well I guess that's it for the thread.
mustang19, I would like to see you explain, in your own words, what the parable of the broken window actually is.
Your papers don't even make that claim. Where are you getting that from?
The things I and others have been trying to explain to you are hardly rocket surgery. Yet you willfully ignore them. I'm sorry but I don't how else to explain your behavior at this point except to call it trolling. That is, I think you're being deliberately dishonest, probably to see what kind of reaction you get.
So far, you've mentioned one specific objection to public infrastructure- taxation. If you believe that everyone should live as a Randian superman, avoiding local roads and living off the land to avoid any use of public services, then I'll just have to disagree on that assessment. Otherwise, people aren't excited about getting rid of public infrastructure because doing so would simply make virtually everyone poorer.
I don't think he's trolling I just think we're zerging him.
mustang19: So far, you've mentioned one specific objection to public infrastructure- taxation.
So far, you've mentioned one specific objection to public infrastructure- taxation.
False. The parable of the broken window was another objection to government funding this stuff. Another was the price system.
mustang19: If you believe that everyone should live as a Randian superman, avoiding local roads and living off the land to avoid any use of public services, then I'll just have to disagree on that assessment.
If you believe that everyone should live as a Randian superman, avoiding local roads and living off the land to avoid any use of public services, then I'll just have to disagree on that assessment.
Straw man. No one here has made this claim.
mustang19: Otherwise, people aren't excited about getting rid of public infrastructure because doing so would simply make everyone poorer.
Otherwise, people aren't excited about getting rid of public infrastructure because doing so would simply make everyone poorer.
Just a continuation of the straw man.
Conclusion: TROLL
Mustang, I really think you're going about this the wrong way.
You don't need to justify public investment. Especially not to anyone on this forum.
If you want to take money from people to build whatever you wanna build then I'm with you.
But let's not pretend that there's not an opportunity cost, let's not pretend that there's not someone getting screwed.
You have to be willing, as a statist, to admit that you're hurting someone somewhere. Just because GDP might go up or a nicer road might get built doesn't mean there aren't broken windows all along the way.
EDIT: And as far as the left wing/right wing stuff goes, most of that is a difference in degree rather than kind. There are aesthetic differences and rhetorical differences. Obviously the left tends to try and present itself as the party of the poor and downtrodden and the right as the party of the rich and privileged. The Right seems to be filled with its fair share of wealthy people but also value voters and people who say they want minimal government or whatever. It's all rhetorical nonsense. Really, the big disagreement is about guns and butter. Neither side is opposed to public investment, there's just disagreement about what the investments should be.
Sure. There world isn't perfect. But the instances where public investment has raised pretty much everyone's income are much more common than the times when mistakes were made or the overall return across projects was negative.
I'm still all for public investment if it allows decent infrastructure. It's worth noting that before the public infrastructure projects, there was no rural electrification, very few paved roads in rural areas, and no interstate highway system. Being able to easily drive to the market or the hospital on well maintained roads is just convenient, too. In theory, private investment would provide all those things. In reality, they didn't exist on anywhere near the scale that they do today before public programs.
Neither side is opposed to public investment, there's just disagreement about what the investments should be.
Depends on what you mean. There have always been definite differences regarding public investment in the Republican and and Democratic budget plans. Or the Moderate and Socialist Party in Sweden, or the CDU and SPD in Germany, or quite a few other countries. Public investment is a major left/right issue, even if neither party goes to extremes (such as, "no public infrastructure at all anywhere").
Well...the main disagreement seems to be on non-defense spending.
The left, for all their supposed doviness, aren't exactly opposed to foreign intervention.
True. But I'm not voting Republican.
If the libertarian party ever wins more than 1% of the presidential vote, give me a shout.
Lol, I've never voted libertarian in my life.
I do vote Republican though. I'm more into guns than butter.
Also there are four elderly supreme court justices, I don't wanna see Obama get to pick their replacements. Kagan and Sotomayor didn't impress me much.
To each his own. Overturning Roe v Wade and teaching creationism in schools just ain't my thing.
Nationalizing everything just ain't my thing.
See what I did there?
@My Buddy
I did that to him earlier and he didn't like it :p I wonder what he'll say to you.
They still passed Citizen's United. As a Republican, you can't be that dissapointed. Unless you want someone like Alito or Scalia.
If Kennedy, Breyer and Ginsburg all stepped down and were replaced with Scalia-esque judges I would be very pleased indeed.
Sotomayor, Stevens, Breyer and Ginsburg did not join the entire majority opinion of Citizen's United. The main part passed on a 5-4 vote with Kennedy, Roberts, Scalia, Thomas and Alito concurring.
Some links:
1. Justia
2. Wikipedia (secondary)
It's just hard to support corporate personhood and oppose corporatocracy at the same time.
It's just hard to support national socialism and oppose corporatocracy at the same time.
Godwin's law confirmed. Experimental data collection complete. Exiting thread.
More importantly though is that even if it took place at the beginning of the study's period, how could you calculate that my national road network overhaul wasn't beneficial when you clearly said: what I'm currently talking about (public investment and infrastructure spending) don't crowd out private spending or consumption by any means. So there's no way my national roadway overhaul could ever, according to you, crowd out private spending or consumption because it is, in fact, infrastructure spending.
Right, so ALL INFRASTRUCTURE SPENDING IS ALWAYS BENEFICIAL...so that $10 trillion road network, escalators to nowhere, or the White Sea-Baltic Sea Canal all register unerringly as GDP growth. The Soviet Apparatchiks over at Gosplan would have *loved* you (except when it came time to prevent the USSR from collapsing). In the long run, those things would detract from GDP. Anything else? | Post Points: 20