Bob Alberti, speaking of the government's role in small business lending, says: > ...the logic of course is that the government is not > trying to make a > short term cash return on an investment... > The > government is trying to make a long-term tax return on their > investment, in > the form of creating jobs as well as creating a tax-paying business.
[MH] Looks like what we have here Bob, are divergent views/philosophies on the role of government in society; and, on the question of what should taxpayer money be used for. Is it the proper role of government to use limited public funds to subsidize high-risk (e.g. they can't get funds from conventional lenders) private business endeavors (especially start ups), and in the process, determine which businesses get funding and which don't? (vs. adequately funding schools, roads, sewerage, crime, healthcare, etc.) In my experience, the government doesn't do a very good job trying to create private sector jobs... plain and simple. And don't forget, along with such government funding programs (each and every one) comes the government and non-profit overhead needed to administer, implement and maintain each program (and at each level of gov't. with pass through funds). I'd characterize these programs as being successful in creating jobs in the support-bureaucracy arena, while providing little, if any, net gain on the street-- as measured by cost-benefit, i.e. the PV flow of relevant tax receipts ten years after the investment- including overhead. To my mind, taxpayers shouldn't be expected to subsidize high-risk business endeavors that benefit a few individuals and their businesses, especially in cases where there is little-to-no equity investment involved. It's a role for the private sector. [I'd make similar arguments against government subsidies to large private businesses (ala Target and Block E), although the arguments are much more complex and there is usually (or should be) significant equity brought forward in such circumstances (not an apples-to-apples comparison); issues brought forward for discussion in a recent post by Tom Leighton.] > One may as well ask what the return is on building a bridge or a > road. Using public funds to build bridges and roads that serve the general public should be a justifiable taxpayer expense. I don't see the relevancy in comparison with the sub-prime / government lending to private business topic. Although, in outlying areas, broad-based public subsidy for the extension of municipal infrastructure is increasingly being questioned. It is argued that the cost of such 'sprawl' should be more heavily allocated toward those creating the demand for service. A 'general tax' vs. a 'fee' argument if you will, currently being discussed at state/regional levels (and in the communities creating the new 'demands.' Michael Hohmann Linden Hills www.mahohmannbizplans.com > -----Original Message----- > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of > Bob Alberti > Sent: Thursday, December 19, 2002 8:01 PM > To: Mpls Forum > Subject: RE: [Mpls] Subprime lenders and gov't. spending snip > Speaking as a small business operator whose loans come entirely from Visa > (i.e. I'm not trying to justify or rationalize something from which I > benefit), the logic of course is that the government is not > trying to make a > short term cash return on an investment, as was Conseco > (supposedly). The > government is trying to make a long-term tax return on their > investment, in > the form of creating jobs as well as creating a tax-paying business. > > One may as well ask what the return is on building a bridge or a > road. Not > too many businesses doing that, either. > > Bob Alberti, President Sanction, Inc. Data Security > http://www.sanction.net Cusp of Longfellow and Seward > "Are you sure that the data on your computer is secure?" snip _______________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Unsubscribe, Digest, and more: http://e-democracy.org/mpls
