NICK SCHULZ: The President’s Internet Blunder. “The implication is that government deserves a bigger slice of the wealth created in the private sector because that wealth was impossible without the initial taxing and spending — and because future taxing and spending will facilitate even more wealth. This argument is not just wrong but revealing in several interesting ways.”
UPDATE: Okay, this is worth quoting, too:
As economist and frequent Republican-party critic Bruce Bartlett recently pointed out, “As of March 31, $452.6 billion of net stimulus funds had been disbursed in ways that show up in the national income accounts. Of this, the vast bulk, $399.7 billion, went for transfer payments. Another $9.6 billion went for subsidies and $68.1 billion for capital transfers to state and local governments. Only $37.8 billion went for consumption and $11.8 billion for investment — the only two categories of outlays that we know add to growth.”
To the extent the Obama administration has been in favor of government investment, it has mostly been interested in explicitly political investments, such as in green-energy technologies; these expenditures satisfy elements of the president’s political base and have often been used to subsidize prominent supporters.
The shame is that there is a good argument to make in favor of government investment in basic research. It’s an argument that advocates of limited government should be comfortable making, along with their more spendthrift friends in government.
But this is not the argument the president is making. And given the spending priorities of the current administration, pointing to past government investment in national-security systems in making its case would be comic were it not so sad.