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Originally Posted by McG
Brain blown. NDP economics right there. Please tell me which markets do not require risk or innovation. yeah, that's right. none.
I'm quite sick of people saying that the government is equal or better at allocation of capital than private businesses or industry. That's what you mean isn't it? Efficient provider is a value statement, not a numerical one. Numerically, the government is least efficient between itself, industry and private business. Businesses exist to maximize profit; please tell me how the government runs a massive deficit with debt payments if it is efficient? Please also tell me why a government shouldn't be doing anything more than breaking even in its operating budgets?
Do you know what a government with a profit should be doing? refunding taxes. Do you know what a government running a deficit should be doing? reduce spending and reallocate or increase taxes.
And this "starbucks" tax is exactly the definition of NDP think; "i know what is best for you". Who are you to judge what people choose to spend their money on? I'm not kidding about this, but quite literally who are you to determine what people choose to spend their earnings on? I personally don't buy at starbucks, but I don't begrudge those that do, or whatever people choose to buy.
And interest payments? wow. People may choose a supplier that charges a higher rate of interest than another, but what exactly do you think happens to the interest income for the financial institution? And where do you think the capital comes from to loan out to these people that pay the interest payments? (hint: savings) and what do you think happens when goods and services are purchased with loans and mortgages? (hint: consumption drives the economy)
Why should you care what people spend their money on? read some adam smith and then come back and tell me about the invisible hand and your "starbucks" tax.
The government is not meant to be an efficient allocator of capital. It is not intended or expected to compete with private industry. It is intended to act for security, protection of citizens, and public order. A debate can easily be had about what else it should or shouldn't be involved in, but the fact of the matter is that it is not ever intended to be an efficient allocator of capital. The government should not be competing with its own citizens to provide goods and services.
I've written too much. if you seriously believe that the government is an efficient allocator of capital, please continue to think that.
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Canadian Telecom industry is probably the best example of where government services deliver better services at a lower cost. We'll call it the MTS experiment.
Note my statement wasn't absolute, the government can be more efficient at delivering services and goods to consumers. It isn't always worse and in some cases can be better. This concept that the privatization will always lead to more efficient delivery is false. And the concept that people will always spend their money better than the government is also false. The absolutism of your position is what I take issue with.