Can Government “Invest” for Growth?

                   

There is a major difference between a dollar “invested” by government and a dollar invested by private industry.

                       

State-control politicians believe that it’s better if government makes the decision to spend. Or as the administration says, “invest,” as opposed to private enterprise doing the function.

                       

The government allocation is made by a political decision. That is often subject to pressures which have nothing to do with supply and demand. Rationing and corruption is bound to follow. Privately imposed decision is, however, more likely to conform what the public wants.

                       

Moreover, private industry investment has a multiplier effect, while government spending does not. Government jobs have no leverage impact on the economy. Their purpose often has political, social and environmental intentions.

                       

Governments do not innovate and create new companies and actual multiples of jobs. Nor do they enervate the needed psychology of a booming economy. Psychological effect is most important. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole tweets.)