When a credit market it tight, there is usually a good reason. Msot often, a Govt. ****up of some kind having destablized the overall financial market.
Originally Posted by doggin94it
Outside National Defense in a Time of Defensive War, Deficit spendig is never "needed".
So, when deficit spending is needed to jolt an economy, it's better for the government to be doing the borrowing than for individuals.
"Collective Action" eh? As in State Forced Change on a Society that doesn't want it?
Second, the government is able to address "collective action" problems in ways that individuals - and even the market more broadly - cannot.
Pure Fantasy. The barrier to entry is the consumer doesn;t bloody want electric go-carts, and the limitations and costs that come with them at current technology levels.
Take my favorite example - the paradox of the electric car industry. Part of the barrier to demand for electric cars is the lack of a widespread network of plug-in stations (without which electric cars are only useful for short-distance trips).
If it wasn't for existing (and massive) tax breaks for them, they would never sell a single unit beyond the "true believer" types.
Unless the elctric car continues to flop in the market of course, upon which point the State, having invested billions on the flo, will have to turn to other means to force their social engineering policy.....i.e., another mandate or making gasoline cars illegal. Wait a while, that is the future, a State mandate of some kind.
But part of the barrier to the creation of a widespread network of electric plug-in stations is the lack of electric cars on the road; it's hard to raise sufficient capital to fund the creation of that network when there are not buyers ready to hand - it's a true long-term investment.
The Government is the least suited to do it, as they are a top-down tyrany, not a bottom up market driver. They create change through force of Law, not desire of happiness of consumer. They create change by removing freedom, the market creates change by fulfilling freedoms.
The government is best placed to address that
Massive incentives I (and you) are paying for that may never show dividends if not forced upon us by Law. Without those incentives, the idea is a total unmitigated flop thus far.
, by incentivizing the creation of the network so that the short term pain of the investment is significantly lessened.
Collective action. **** the individuals and companies so the worst individuals don't get left behind.
the type of collective action that the market has a hard time providing
Asbolute fantasy, the NEw Deal was a failure economicly. Without the War, the U.S. would never have recovered from it.
Except it's actually not all that fuzzy. Take the Great Depression and the New Deal (the classic example of a government stimulus that worked).
What the NEw Deal did was bring socialism to America in a way it never had been before, a process that has continued unabated since then, and has failed at every single step along the way.
It's sad that I'm beginning to know how the people felt in all those countries as they fell to Communism post-WWII. All the signs are there in the U.S. today. Be ****ed if I'm going to be a victim like those folks were.