Government Funding, the Economy & wealth Gap

Politics
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Inspired by a conversation in another thread, the role of government in the economy has been debated since our founding.

The federal government is not supposed to produce something. But the government can play a key role in the success and growth of the economy.

Federal spending does stimulate the economy, in the private sector. Government funding also creates new products and sometimes new industries by funding R&D that private companies cannot do, as their has to be a solid ROI in most cases.

EV’s and Smart phones are the result of government R&D funding. Once the technologies were proven viable the private sector took that technology was was able to capitalize on the innovative breakthroughs.

Those 2 technologies have created a lot of wealth for many people. Add in the internet…and it becomes very clear that the track record of ROI funding by the government is a good investment. The private and public sector working together works.

Of course there are many projects the government fund that turns out not to be viable.
That being said, w/out government funding R&D and seed money for new companies, our economy would not be assolid and vibrant.

I know this goes against the conservative mantra the government cannot do anything right, and/or it is not the job of the government to do such things.

What say you?

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Need time to gather my thoughts, but let the discussion begin in earnest.

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This is the classic Keynesian Economic argument. It is at odds with Supply Side economic theory.

You quickly changed gears from economic theory to government R&D funding.

Targeted government funding for R&D can sometimes be seen as a good thing. But as with everything else, it can be abused.

For instance, R&D funding for pet DEI projects is not a good thing.

By and large, I believe big government in its current form is out of control. I see DOGE as a good thing. Hopefully, we will see Trump’s efforts to reduce the size of our bloated government be successful.

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Hopefully this thread will touch on various topics regarding the economy, and economic theories.

I do not want this to become a DEI thread, but what is the issue promoting, or simply recognizing diversity, equity, and inclusion. How are those bad things?

Should we promote homogenous inequity/unjust and exclusion/discrimination?

Is that good for business?

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I was using that as an example.

Obviously, my opinion, but here are examples of what I might call R&D boondoggles.

NIH grants
The National Institutes of Health has been criticized for funding projects such as studying the effects of meditation from reading Buddhist texts, and studying whether mothers love dogs or their children more

NSF grants
The National Science Foundation has funded projects such as training mountain lions to use treadmills, and studying shrimp’s ability to walk on treadmills

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Like when it pays for a virus that becomes a global pandemic. :wink:

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It can also destroy it.

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The best it can do is to just get out of the way.

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Asian nuclear power and asian semiconductors are run with mostly government money, and those industries have been much more successful than their American counterparts over the last decade.

In the past 10 years, more than 34 gigawatts (GW) of nuclear power capacity were added in China, bringing the country’s number of operating nuclear reactors to 55 with a total net capacity of 53.2 GW as of April 2024. An additional 23 reactors are under construction in China. The United States has the largest nuclear fleet, with 94 reactors, but it took nearly 40 years to add the same nuclear power capacity as China added in 10 years.

https://www.eia.gov/todayinenergy/detail.php?id=61927

It’s important to remember that if we don’t do it, other countries will. And there are consequences to that.

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And China didn’t have to put up with the “China syndrome” hysteria that slowed our development of nuclear reactors.
How do government mandated safety regulations in China compare to government mandated safety regulations in the US?

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Are you intentionally trying to make us laugh?

In the U.S., government regulations have made it cost prohibitive to build nuclear power plants.

China doesn’t have that problem.

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Or gain-in-function “medical” research, it seems.

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We could do that here too. Government just comes in, decides where a reactor will be, and the locals just have to deal with it.

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Just an example – purely anecdotal, of course – but real life.

Larry Ellison. Multi billionaire. In cobbling together the products and services that Oracle sells, he has become ultra-rich. In his wake of richness he has created tons of millionaires, either who started out with him in the early years, or who invested in his company along the way. Oracle has dozens of C-level and E-VP-level executives, all who likely earn a million or more per year, and below them lower VPs, Directors and other bigger paycheck managers, as well as mutiples who have already retired from those jobs. And after that a hundred thousand 6-figure engineers and professionals. (Never mind the hundreds of thousands who have already retired.)

The same anecdote can be told for lots of billionaires and multi-millionaires. They all may be “running away” on the graphs showing the gap between their value and the middle class, but the ripples and waves they have made in the middle class have allowed the middle class to live far richer lives than back when the gap was smaller.

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The technologies you make reference to were dual use technoligies, researched to enhance military capabilities, especialy in the realm of command, control & communications. I have no problem when government funds R&D to enhance our military capability and it ends up providing civilian improvements. But a lot of this R&D spending is now for garbage pet projects that can’t be tied to any of Government’s proper missions. And redistribution of wealth isn’t a valid function of our government.

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Such as?

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Looking to kickstart the thread by offering my thoughts on Trickle Down.

This provides a good summary.

Interestingly JFK was a proponent of Trickle Down. He infamously said, “A rising tide lifts all boats”, which aptly summarizes the theory.

A Thomas Sewell quote from the article:

Thomas Sowell, an ardent supporter of trickle-down theory, argues that the popular definition gets it backward. Instead of benefiting the wealthy first, the policy actually benefits the working class first. This may sound impossible – after all, it’s the wealthy who get the tax breaks, not the poor. However, Sowell maintains that because the wealthy make investments in order to make a profit, they spend the money first on expenses of the business venture. (In other words, spending money to make money.) These wealthy investors must pay workers, thus creating jobs, before they can expect to see any profits. Therefore, it’s the workers who receive the most immediate relief

I have a somewhat different view of trickle down. Unfortunately, I find there aren’t too many who agree with me on either side of the political aisle.

I liken trickle down to those businesses which service the rich or which benefit from their proximity to an enterprise owned by the rich. For instance, those rich enough to own a yacht.

There are a multitude of businesses that cater exclusively to the construction, outfitting and detailing of those yachts. There are the service personnel that keep them in tip top shape. There are those who operate the yachts.

Those are real people numbering in the 10s of thousands.

I often hear from LIBs that those people are simply getting table scraps from the super-rich. I believe those 10s of thousand who earn a good living off of the super-rich, would strongly disagree.

Another example would be Cowboy stadium in Arlington Texas. There are a multitude of businesses that have sprung up around the stadium. Try and convince them that they are simply receiving table scraps.

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With the use of the words “wealth gap” this thread lost any validity it might otherwise have had.

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I see that as the starting point for vigorous debate.

The wealth gap is a liberal creation. Much of their rhetoric focuses on that.

I was actually hoping LIBs would join the discussion so that we could explore it further.

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Losing skilled labor is an example.

The Chinese businesses that work on nuclear megaprojects have decades worth of government work to do and gain experience with. Meanwhile, the American crews that worked on Vogtle are scattered around doing whatever.

The next time someone wants to build a reactor in the United States, they’ll have to start from scratch like it’s the first one ever built. Chinese just get better and faster.

Asian semiconductor workers have to be imported into Arizona from countries with government greased fabrication.

Their labor force gets to stay in shape because of their industrial policies