Tuesday, July 15, 2014
Economic Nonsense of Need for Public Works Projects to Improve Economy
Economic Nonsense of Need for Public Works Projects to Improve Economy Here Are Some Examples of Major Wonderful Public Works Projects of History that Illustrate that Public Works Projects Can Be Wasteful Luxury Rather Than Real Investments Lex Loeb Contributor Network . I had a economist friend who taught me that virtually anything the government intends to do can be done and that their goals can usually be met. This is especially true of modern governments that control the money supply with a printing press. Government can get the results it hopes to get by focusing capital where it wants it to go. A prime examples of major public works programs that flourished and got astounding expected results of infrastructure were created by Mussolini, Hitler and Stalin. Hitler took a bankrupt Germany and made a show case out of it. The economy seemed to be doing just fine under early Hitler. Unfortunately after initial public works projects ran out, Hitler decided he need to convert public works toward his world domination plans. Had Hitler not gone down the world domination pathway, he would have had to find more public works projects to re-employ all the public works employees that at some point had some profit potential to pay for their continuation. Stalin went on a building boom too . He built the most beautiful subway system in the world in Moscow but that expensive system never actually produced any real economic growth in the soviet union. Eventually the public works programs of Stalin had to shift employment to yet another world domination scheme in order to become partly self funding. The same thing happened under Mussolini in Italy, The public works programs turned out to be big propaganda value programs with little economic driving force for the rest of the economy. The only exceptions were public works projects such that built hydro electric dams and electric generating and distribution systems. The rules for public debt and public works development are really the same for business and consumer debt. People should only borrow money for business purposes where they can expand their productivity and not for luxurious presentation of conspicuous consumption. It is just as stupid for people to borrow loads of money to buy a fancy BMW status symbol car as it is for the US government to go on a public works spending spree for luxurious national symbolism of national progress. It is also absurd for government to do what the private sector could do by itself and remain taxable entities because if government produces what the private sector does it is not taxable. Yes it is a wash and benefits should accrue to government but it is not always clear , without competition, that the government is going to produce the economic benefits efficiently as much as private competitors would. Hidden costs are there plus the government tends to add a tax on top of the public benefits it is supposed to have produced by endlessly increasing user fees. Government owned monopolies are really the only kind of monopolies there are. Don't expect government run monopolies to be tax free because the tax is factored in more than once if they think they can get away with compounding the taxes they can add just by virtue of having monopoly status. The economy suffers from the same result of paying higher prices to OPEC which is essentially a tax paid to various foreign governments over their production costs. Same thing happens in US public works projects where government becomes a domestic cartel. The abuses of luxury public works spending and multi-level taxation can be seen in Portland, Oregon's Pork barrel public works projects. Portland has a mercenary public works army of workers that always need some new project and their powerful government lobby seems to always be able to get some new public works project . one of the latest is a useless sewer digging project that is only going to cost the public more in the future than for the initial costs because the government has assigned a green environmental utility value to the project so that the government can "recoup" their expenses which happen to be our taxes! The idea is that they will create a special sewer to keep waste out of the rivers and have a permanent overbearing bureaucracy that will use the sewer as a money making part of the government charging residents of the Portland area for the service of gravity allowing waste water to flow into a big new sewer! Less than 2% of Portland residents can see that this type of public works project is a complete scam and the rest cheer it the way Nazi party members fell in love with Hitler's pageantry and parades. The fact is most home owners and renters will pay higher fees in the future for using a new sewer they already paid for because the bureaucracy wants to grow. Portland already has that with it's Trimet mass transit franchise and with the Metropolitan service district. The public works have absolutely no public benefit but end up existing as government owned private businesses that charge the public monopoly prices rather than subsidize the public's right to use what their tax funds paid for. New Yorkers seem to be found of paying tolls for bridges they already paid for in the same manner. One of the worst most abusive public works projects in recent Portland history, besides the zoo and omsi is the OHSU tram. First of all, like Triment, the people pushing all the green projects are importing luxury equipment from foreign vendors and this is hardly helping the local economy. The OHSU tram ran over 60 million dollars, more than 4 times the cost estimated to build , the imported swiss tram had to be dressed up to give the thing a futuristic look for local symbolism value and that customization cost a fortune. Worst of all is the same odd monopolistic accounting goes on about how use of the tram has to be a money making means of returning the government's money that tax payers already paid for! It just gets bizarre. The same thinking and the same sort of people are taking over the federal government now promising the virtues of endless public works programs in an economy that they complain about being so bad even when unemployment levels were just 6 percent lower than the best of the public works countries of Europe! Ambitious Government builders coming into office love the luxury effect and would love nothing better than having the chance to build their own Stalinist places and subway stations and then add monumentation to that. For those looking foreword to initial employment beware that mentality ends up with world expansion plans after the money is exhausted. Some people in America have followed the history of the Vietnam war and see that government did seem to be shifting its public works mentality to war in that time. During the Bush War in Iraq and Afghanistan it was the democrats on television calling for the reinstatement of the draft not republicans. That is where you end up going with a public works mentality. Conscription is the morality of doing your part in the plan to have public works. A fare share of work is what ultimately sunk all of the communist countries because ultimately people want to have incentives to work not the mandatory requirement. The big push to turn the US into an even bigger public works nation is one of the most dangerous and stupid things that could happen. It is really all about some people having big ambitions with you included in their plans. If you don't like monopoly pricing you might not really want government services that will result and if you think that the gas tax you are already paying is high enough and used inefficiently to maintain existing roads you are in for a rude surprise. There is no reason to believe that higher gas taxes improve roads any more than existing high gas taxes. Companies getting business from the government to build and improve roads naturally want a higher profit margin if their lobbyists can get the government to raise the taxes they expect to get a cut in the deal. Public works project have about as much public bidding for work of independent contractors that the Bush admin gave to Halliburton for war effort services in Iraq. It is interesting to note that the same people telling us we needed more public works were doing so when unemployment rates were the lowest in the industrialized world, about 6%, then they finally got their wish and the economy went into a decline and suddenly Obama was characterized as the new FDR , and unemployment was still below 10% which is lower than a lot of countries with excessive public works programs. Beware the people pushing the public works economy are ambitious and have a lot of self interest and their new deal will work like the tram in Portland where the public pays and the government recoups that cost for your benefit with high user fees. Wow what an exciting time to be alive in America again! The reality is that the public works nonsense will kill employment elsewhere in the economy and we should be able to reach French unemployment levels above 15% once all the public projects begin! Who is this Klugman who got a Nobel Peace Prize in economics telling us we need his public works cronies to take control of the country and monopolize everything? The fallacy then becomes one that they can import fancy European trains to replace cars in the USA to save the environment and make the economy better the way Portland does with it's light rail and trolleys that have done little or nothing to take private automobiles off the roadways! Public works projects can do much that individuals and private corporations cannot do but the politics in the US congress already is pork barrel oriented with special interest rewards the whole raison d'etre that people occupy those offices. So unless that changes expect a massive waste of money on projects that return little or nothing to tax payers and then extract future fees along the Robbert Moses philosophical means of having a shadow government of public ally owned private businesses in businesses for themselves like the OHSU tram in Portland , the Portland zoo and a sewer system that promises to tax home owners and renters for plumb gravity flow for thousands of years so people can have life time prestige jobs and retirement benefits the tax payer also has to pay. Before you vote for bigger better public works control of the economy find out who it is pushing the program and why they are so ambitious and be sure that the benefits of the project are not double or triple taxed as an ongoing means for the government to create essentially private companies that benefit ambitious insiders exclusively. .