How Government Crowds out Private Investment

Students: Hear Steve Davies live at the Scholarship and a Free Society http://lrnlbty.co/wz3Ao9 or The Challenges and Future of Liberty Seminars http://lrnlbty.co/zvFZfS this summer

Investment capital is scarce, which necessarily implies that there is a trade-off between government bonds and other types of economic activity. Put another way, investing $1.00 in government debt ensures that the same $1.00 will not be used for private investment or goods and services. According to historian Stephen Davies, government spending will almost always (or perhaps always) be less productive than private spending. This is because government agents spend other people's money on somebody else. Additionally, government spending operates outside the realm of profit and loss, making it difficult to detect whether or not resources are being wasted.

Watch more videos: http://lrnlbty.co/y5tTcY

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• investment
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[Wesker1982]

These short videos are GREAT! Very good for passing around.

[jetboyJ22]

@whoo689 Government bonds are only a rational investment because of the nature of government- namely, the investors think they will get a good return because the government has the power to tax and print money to repay them. Private companies must be productive to repay bonds, while the government need only raise taxes or fire up the printing press. It's like asking investors to choose between investing in a company that could fail, or a company that can force everyone around it to pay you back.

[TWSceptic]

@bullshit3118 What a pathetic personal attack from probably a retarded American. And you're stupid enough to not understand that the origin of the problem is always government, since they bring the moral hazard where it otherwise wouldn't have been there. Free market > government. British economist > random idiot on YT with dumb username.

[ElJefer]

@bullshit3118

"a doctor in economics with a British accent..look out! More bullshit ahead!"

Ad Hominem Fallacy

"he forgets to mention that when lobbyists can pay off government officials and some officials in government have a nice job for them in the corporation that hires the lobbyist after their tenure in office..it is not the government, but the corporation running the show!"

>>This is irrelevant to the argument that the government misuses money

You missed the whole point.

[bullshit3118]

oh oh a doctor in economics with a British accent..look out! More bullshit ahead! he forgets to mention that when lobbyists can pay off government officials and some officials in government have a nice job for them in the corporation that hires the lobbyist after their tenure in office..it is not the government, but the corporation running the show! Go and buy government bondsthe corporations and the Fed only use it for fools who want to fund their profit making schemes. Take your PhD andshoveit

[joecow12]

@VaginosaurusRex Kitten Fights Apples! Holy crap, I'm missing it...but I agree.

[VaginosaurusRex]

the world would be a better place if this would get millions of views, while "Kitten Fights Apples" got 2,000.

[bdg323]

@keithradamsstatus Then why was our economy bigger with less colonization, should it not have been the opposite? If our growth was without much colonization, why was it so slow during the depression in comparison to England and other countires, who paid less in government spending in comparison to FDR? Also, on a note about the recession of 1936, the Federal Reserve had decided to tighten the money supply after its large expansion, which economists also argue caused the recession.

[keithradamsstatus]

@bdg323 Interesting argument I will do some research on various countries during this period and see what policies they used to get out of the depression, I'm pretty sure they followed are lead - for the most part.

Goodnight

[keithradamsstatus]

@bdg323 Weak argument, America was not a major holder of colonies like the european countries - proving them with cheap labour and cheap resources. Also how did these countries come out of their depressions? Public works and government spending .

[bdg323]

@keithradamsstatus They only shrank military and some small amount of other spending. Also, spending was lowering from 1939 til 1941 (when the USA joined in WW2, around the end of the year) and unemployment was lowering faster than it was before. Also, the government started lowering spending in 1937, and unemployment also lowered quicker than before! Also, every other country was over the Great Depression for years, yet we were still in it!

[bdg323]

@keithradamsstatus Yes, he was a critic of it, and rightly so. I am just showing an example of someone in the FDR administration who saw that the New Deal didn't work.