The Rationale for More Government Spending

Innovation is the key driver of competitiveness, wage and job growth, and longterm economic growth. Therefore, one way to approach the question of how to improve the competitiveness of the United States is to look to the past and examine the factors that helped unleash the tremendous innovative potential of the private sector. Among these factors, three pillars have been key: Federal support for basic research, education, and infrastructure. Federally supported research laid the groundwork for the integrated circuit and the subsequent computer industry; the Internet; and advances in chemicals, agriculture, and medical science. Millions of workers can trace their industries and companies back to technological breakthroughs funded by the government. The U.S. educational system in the 20th century produced increasing numbers of high school and college graduates, more so than anywhere else in the world. These highly skilled workers, in turn, boosted innovation. The transformation of infrastructure in the 20th century was nothing short of amazing: the country became electrified, clean water became widely available, air transport became ubiquitous, and the interstate highway system was planned and constructed. All of these developments helped businesses compete by opening up markets and keeping costs low.

This "report" is little more than propaganda. It was foreshadowed by commentary from such idiots as Joe Biden and Elizabeth Warren. It will be used as the rationale to convince the public that Federal spending is an essential element in our past economic success and that we must do much more in the future to insure economic growth.

The examples used are real but the conclusions are a distortion of reality. Box 1.1 & Box 2.1 are "factually correct." However, the interstate highway system was an idea created by the DoD for defense purposes. The development of ENIAC was a DoD research project as well. Look at the list in Table 2.1. Of the 16 companies sited, half are DoD R&D related work. And what did His Excellency cut the other day? DoD budget!

There is nothing fundamentally wrong with government funding basic research. The overwhelming majority of it is money thrown down a rat hole but in the great scheme of things basic research isn't a big dollar figure. Occationally, someone with a creative mind sees the opportunity to extend that research, productize it and, maybe, they hit on something. We've seen tremendous successes stem from both DoD research and NASA. Both are having their budgets cut.

What's important to understand is what the Federal government is doing now via failures like Solyndra et al is NOT BASIC RESEARCH. It's attempting to create a business or entire industry that cannot stand on its own economically. And far too often as is true on both sides of the isle, the beneficiaries are political cronies who will not risk their own capital but have no problem doing it with tax dollars.

Fight the propaganda!

"Conservatives accept human nature as it is, while the left pretends it’s otherwise. Right vs. left is the difference between reality and fantasy. And when the lefts’ illusions are destroyed, there’s nothing left but brute force and thuggery.

Spok speaks here of "conservatives" who understand the Founders' views on human nature, the tendency of humans to abuse power once it is delegated to them, which is the reason for the Constitution's strict and certain limitations on that power.

". . . it would be a dangerous delusion were confidence in the men of our choice to silence our fears for the safety for our rights. . . it is jealousy and not confidence which prescribes limited Constitutions to bind down those whom we are obliged to trust with power: that our Constitution has accordingly fixed the limits to which and no further our confidence may go. . . . In questions of power then let no more be heard of confidence in man but bind him down from mischief by the chains of the Constitution." - Thomas Jefferson

This Jefferson quotation is cited in Dr. George Carey's essay on "The Founding Fathers' Views of Human Nature--Critical to the Structure of the Constitution," pp. xxvii of "Our Ageless Constitution."

Carey points out that both Hamilton and Madison, in the 85 essays explaining the Constitution to the people, provided "the clearest and most comprehensive picture of the Framers' views regarding human nature."

"In every government on earth is some trace of human weakness, some germ of corruption and degeneracy, which cunning will discover, and wickedness insensibly open, cultivate and improve. Every government degenerates when trusted to the rulers of the people alone." - Thomas Jefferson

As to today's so-called "progressives," who dream of a Utopia where they will "redistribute" away the legitimate earnings of some in order to buy power from others in the society, perhaps today's generations might consider the words of Samuel Adams:

"Is it now high time for the people of this country to explicitly declare whether they will be free men or slaves. It is an important question which ought to be decided. It concerns more than anything in this life. The salvation of our souls is interested in this event. For wherever tyranny is established, immorality of every kind comes in like a torrent, it is in the interest of tyrants to reduce the people to ignorance and vice.” - Samuel Adams

And:

“The utopian schemes of leveling and a community of goods, are as visionary and impractical as those which vest all property in the crown. These ideas are arbitrary, despotic, and, in our government unconstitutional.” - Samuel Adams

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