-----Original Message----- From: Michael Hohmann > 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.)
The question is based on a false premise and employs a false dichotomy. The false premise is that government is somehow supposed to stand aside from involvement with business growth. It is -A- (not "the") role of government to encourage small business development, even if that calls for an initial short-term loss. Without such encouragement, we might soon only have large businesses. And as we all know large businesses don't pay a lick of taxes, so who would the government get its tax money from? :-) The poor, overburdened taxpayer would pay an even larger portion! The false dichotomy is positioning support for small business versus other roles of government in an either/or fashion. Of course what really has to be done is that appropriate, prudent allocations of funds be distributed to all these roles. Whether limited economic growth funds should be invested this way or that is one argument: to suggest there should be no such funds at all strikes me as reckless. > In my experience, the government doesn't do a very good job trying to create > private sector jobs... plain and simple. By "plain and simple" you are attempting to appeal to the notion of easy, black and white choices: an emotional appeal, rather than a logical one. And your experience, while valid for you, is hardly a scientific measure to be applied to all of society. Government is not, in this case "trying to create private sector jobs." Government is simply assisting a private effort to do so by providing something which for-profit entities simply aren't able to do. Societally, it's the encouragement of the taxpayers towards their fellow citizens who would grow the economy. I think that's a perfectly appropriate role. And it's not as if these loans are handed out willy-nilly to anyone who walks in off the street: the qualifying requirements are just as stringent. The state simply has a different set of goals than a bank, and will select different recipients. Large companies, backed by powerful lobbyists, receive abundant financial incentives from government even in lean times. To deny mere low-interest loan support to small businesses at the same time seems both unfair and societally counterproductive. Today's small businesses are tomorrow's large businesses. > 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. And I think this is a mischaracterization and oversimplification of the issues, slanted to cast the situation in the worst possible light. Say instead that taxpayers should be expected to contribute to the growth of the economy and the creation of living wage jobs through being willing to spend a miniscule amount on encouraging innovation and entrepreneurship without the same profit drivers as a for-profit bank. The private sector has a different set of goals than those of government -- goals driven by short term profit rather than long term investment. It's perfectly appropriate for government to support its own goals through reasonable, prudent investments of its own. It's perfectly reasonable that government's investment priorities would differ from those of banks. > 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. Seeing as that's exactly what I said that you were doing -- comparing governmental sub-prime lending with private business investment -- I'm glad we agree. The role of government is to promote the general welfare, among other things. To do this the government has to set its own priorities, not depend upon the decisionmakers in the private sector to establish the sole standards by which both public and private funds can be invested. The government's long-term investments include not only the education of children, and the building of roads, but also in fostering new businesses. 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?" _______________________________________ 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
