I'm not against public sector spending or deficit spending nor am I a advocate for returning to the Gold standard.
Govt funding has its place and if done right can lead to innovative technologies and extraordinary accomplishments and yes, economic growth
My Father was a retired NASA engineer and worked on the Appolo missions so I have a soft spot for the Aerospace community
That kind of funding does more than just get us to the moon 6 times or put rovers on Mars. It inspires young people to pursue carreers in Math and Science and eventually become our next generation of Aerospace engineers or even Astronauts.
Is NASA's primary objective to pursue profits and wealth ? Nope. Its Contractors have to profit though even if those profits are not in their Aerospace devision.
Lockheed Martin couldn't survive on Aerospace funding alone, it relies on defense Contracts to make up for the losses and cost overruns its sees in its shrinking Aerospace division
So, not against Govt spending but I am against wasteful spending, spending on investments that are obviously going to fail ( Green jobs ) and the corruption and croney Capitalism that massive stimulus seems to breed.
Crony capitalism is never a good idea, of course. But poor investments are a government's job. NASA bred a lot of great innovations, but going to the moon was never going to be a profitable endeavor on its own. The kind of basic research that the government funds is not profitable on its own. It's not the government's job to make a profit, it's the government's job to keep society running, and quite often that means doing things that the profit-driven private sector would never do.
Wasteful is in the eyes of the beholder. You obviously don't like the Green Initiative, but if those resources aren't otherwise being used, then nothing is being wasted. That wasteful government spending might not have led to profits, but it did lead to some innovations, and it employed some people, including scientists and engineers, which is important. If you don't keep your big brains employed, then you lose them. And in the end, we are going to need that technology anyway.
At the very worst, government spending is only "wasted" for one round of spending. After that, money is in people's hands, and they spend money the way they always do. That in itself is stimulative. Proper investment is undertaken by the private sector in order to earn those dollars. If you want the money that I earn (or just get from the government), then invest in something that I'm likely to buy. The private sector is very efficient at doing that - they convince us to spend our money on all sorts of junk that we don't need. They don't need any more help, all they need is for us to spend more money.
From a investment point of view Stimulus is a bad idea. For ex, funding labor with bonds that are purchased with private sector Capital reroutes that Capital into a investment that has little to no return
But those bonds don't reroute anything. Nobody opts for the tiny return on bonds over investment IF that investment was going to happen anyway. If the yield on bonds was 10%, then you might have an argument.
I also think its irresponsible to ignore as an indicator investor reaction to policy changes, but fiscal stimulus does just that.
If we introduce large expansive fiscal initiatives and we start investors shopping offshore for yields or Corporate capital expenditures falling ( more than they already are ) then its time to stop and try something else.
If we actually went forward with any large, expansive fiscal initiatives, then investors would be staying right here, doing whatever they could to earn those dollars. You completely overstate what our government spends in the way of stimulus.
Those offshore funds are available to invest anywhere in the world. So why aren't they investing? It's because the demand isn't there, and they don't want to lose their investment.
Japan stuck to Keynesianism like it was their religion. That level of ideological loyalty in a ruling Political party is dangerous and irresponsible.
No, they didn't. If they were truly Keynesian, they would never have raised their consumption tax. They shouldn't even
have a consumption tax in the first place.
I don't really know what Japan has done with their government spending, but if they are spending it at the top instead of at the bottom, that isn't Keynesian at all. Spending at the top is more supply-side than anything. Spending at the bottom is stimulus spending. If their debt has gone to propping up banks (as much of our debt went in response to the crisis), that isn't Keynesian, because it's not stimulative. And I suspect that that is where much of their spending has gone.
