Government not only does NOT contribute to GDP, it is a GDP DEFLATOR.
When our decrepit, faux President, Elderly Joe with the cognitive issues, cancelled the Keystone Pipeline, cancelled drilling leases, put ANWR off limits, put LNG projects on hold -- he stopped energy investment in its tracks thereby deflating GDP and business expansion that would have created goods and services whilst also driving the price of gasoline up and sparking inflation.
All this stuff is connected delicately and in gross terms.
It gets worse.
Government eats money such as when they sold the excess parts of the Trump Wall at a firesale auction for $0.08/$1 value thereby destroying the value of goods and services for which they had already paid.
The topper: for a single USD to arrive in DC to be spent requires $0.26 to collect. This is one of the most compelling reasons for a small, streamlined gov't -- the bloody friction associated with simply collecting taxes.
One of the problems is that providing "incentives" is the only way some of these states would attract business. Their tax structures and regulations are unfavorable, so governors sense the pressure to "do something" and they create this mega-incentive packages for splashy names or ideas.
The other thing it does is give them more control and power, which is perhaps obvious.
You could say, "Alright, so lower your taxes and reduce regulations so that ALL businesses are attracted here," but that would reduce their ability to control their kingdoms. This is why I think Florida has it right, and it's why I like Ron DeSantis quite a bit.
I think the others like picking winners and losers, and they like having companies and people beholden to them. Since there is no short-term or mid-term penalty to using state money, they all do it.
I would love to see deregulation and a fair tax structure for everyone--including smaller businesses that don't get these benefits--but we all know that the structure won't allow it to happen.
It's a fundamental flaw in our republic. I think it could only be resolved with a Constitutional Amendment prohibiting funding or financing of private interests.
If the EV industry is so lucrative y doesn’t that fat f Pritzker put his own billions on the line because he knows it won’t work. Anything the government tries to do goes to shit.
Could one argue that government spending in the private sector, whether industrial policy like EVs or stadiums, are illegal and unconstitutional “takings”? Ultimately, that’s what they are.
The gist of it is that politics and government have now come full cycle and done a 180, whereby it used to be businesses bribing politicians to do business there in their fifedoms, but instead of that, we now have politicians bribing corporations to come to their fifedoms to do business so they can buy votes and promise jobs and think that they look like heroes.
It's an obnoxious and vile vicious cycle and circle.
A liberal friend once said after the 2008 meltdown and govt intervention, look at all the business activity that is causing! Sure, I replied, but a conservative economist would say that all you are doing is taking a bucket of water out of one end of a pool and dumping it in the other end. Yes, different companies won and others lost, but the net effect is zero. She didn't like that.
As you say, govt does not contribute to the business activity, it merely moves it around.
Government not only does NOT contribute to GDP, it is a GDP DEFLATOR.
When our decrepit, faux President, Elderly Joe with the cognitive issues, cancelled the Keystone Pipeline, cancelled drilling leases, put ANWR off limits, put LNG projects on hold -- he stopped energy investment in its tracks thereby deflating GDP and business expansion that would have created goods and services whilst also driving the price of gasoline up and sparking inflation.
All this stuff is connected delicately and in gross terms.
It gets worse.
Government eats money such as when they sold the excess parts of the Trump Wall at a firesale auction for $0.08/$1 value thereby destroying the value of goods and services for which they had already paid.
The topper: for a single USD to arrive in DC to be spent requires $0.26 to collect. This is one of the most compelling reasons for a small, streamlined gov't -- the bloody friction associated with simply collecting taxes.
JLM
www.themusingsofthebigredcar.com
One of the problems is that providing "incentives" is the only way some of these states would attract business. Their tax structures and regulations are unfavorable, so governors sense the pressure to "do something" and they create this mega-incentive packages for splashy names or ideas.
The other thing it does is give them more control and power, which is perhaps obvious.
You could say, "Alright, so lower your taxes and reduce regulations so that ALL businesses are attracted here," but that would reduce their ability to control their kingdoms. This is why I think Florida has it right, and it's why I like Ron DeSantis quite a bit.
I think the others like picking winners and losers, and they like having companies and people beholden to them. Since there is no short-term or mid-term penalty to using state money, they all do it.
I would love to see deregulation and a fair tax structure for everyone--including smaller businesses that don't get these benefits--but we all know that the structure won't allow it to happen.
It's a fundamental flaw in our republic. I think it could only be resolved with a Constitutional Amendment prohibiting funding or financing of private interests.
If the EV industry is so lucrative y doesn’t that fat f Pritzker put his own billions on the line because he knows it won’t work. Anything the government tries to do goes to shit.
The EV market and the gov't push toward EVs at every level is at least 10 years, maybe 15, quicker than the market.
JLM
www.themusingsofthebigredcar.com
And doesn't take into account the real world, or the way the real world works....EV in remote areas of Grand Marais, MN HA
Could one argue that government spending in the private sector, whether industrial policy like EVs or stadiums, are illegal and unconstitutional “takings”? Ultimately, that’s what they are.
The gist of it is that politics and government have now come full cycle and done a 180, whereby it used to be businesses bribing politicians to do business there in their fifedoms, but instead of that, we now have politicians bribing corporations to come to their fifedoms to do business so they can buy votes and promise jobs and think that they look like heroes.
It's an obnoxious and vile vicious cycle and circle.
A liberal friend once said after the 2008 meltdown and govt intervention, look at all the business activity that is causing! Sure, I replied, but a conservative economist would say that all you are doing is taking a bucket of water out of one end of a pool and dumping it in the other end. Yes, different companies won and others lost, but the net effect is zero. She didn't like that.
As you say, govt does not contribute to the business activity, it merely moves it around.
Come on man! “Government is just another word for the things we do together.” Barack Hussein Obama
Great post!
Please sign your name at the end of your dissertations.
Thanks,
Matt
This guy is one of the economists covering sports stadiums. His Twitter feed is pretty good. https://twitter.com/jc_bradbury
Allan Sanderson did all the early work so I cite him. I know his work. Thanks for the link.