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I think you may be conflating the directionality of success and "high-investment", to use your terminology. "High-investment" government tends to follow domestic success, not vice versa. For instance California is a phenomenally clear example of this. I assume you know what the San Francisco 49ers are named after?

It was the California gold rush of 1848-1855. 49ers was a slang term for the miners. This gold rush created San Francisco. In 1846 California was a backwoods settlement of 200 people. In 1842, its population was 36,000 and it was booming as the primary port on the way to the gold rushes. California was the only state that was granted statehood (which happened in 1850) without first being a territory as the US raced to lay claim to its riches and successes. The Comstock Lode (silver's not quite as exciting as gold I guess) discovered in Nevada would further grow the city.

Even getting down to Berkeley. The university was founded in 1869. You know all those Phoebe Hearst references around the campus? She was a huge early donor that helped really develop the college. And the money? She was the wife of George Hearst, who struck it rich during the gold/silver rushes. The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later.

The entire Silicon Valley boom, through today, is under 'high-investment'

> The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later.

Democratic government is "by the people, for the people";. That was Abraham Lincoln's original quote: "government of the people, by the people, for the people". It's the people making decisions and investing in their community, fairly and democratically, instead of an aristocracy / oligarchy of a few wealthy people making the decisions.

Silicon Valley was built on defence spending as chronicled by Steve Blank : https://steveblank.com/secret-history/

The modern startup boom, from Netscape until now, is not defense spending but mainly private enterprise, in a high-tax, high-investment state.

Poor countries are actually a great example. Vietnam for instance is an extremely poor nation. Their parity adjusted GDP/capita is $6,925. It's $2,305 nominal. They end up spending a paltry $450/capita party adjusted on education [2]. In the US we proudly spend $3,455/capita - upwards of 700% more. [1] This is a listing of nations in academic performance by PISA results. [2] This is a list of countries by how much they spend on education, if you'd like to compare other nations. Vietnam is not a single outlier.

Vietnam is currently scoring 22nd in the world on math, and 7th in the world on science. The US is 41st on Math, 24th on science. And we spend more to anywhere in the world, excepting 3 nations, on education. You'll find Vietnam is not alone in this peculiar aspect. The correlation between government spending on education and educational performance is not particularly good. And people still think we need to substantially increase educational spending. This is really one of the fundamental problems with government. Everything is seen through the lens of money. Is something not performing well? You can solve it by just throwing more money at it! Of course this is not true. The spending tends to be wasteful at best, and completely ineffective at worst.

The point I'm getting at here is that as you see these sort of results of spending across the range of government fields, being asked to give them large sums of your money to continue spending is one reason people can grow discouraged when being forced to give this government so much of their money. Or consider our completely pointless wars. The total cost for the Iraq war alone is going to end up in the trillions of dollars. And on top of all of this it seems that no matter how much the government increases their gross receipts, they still manage to dive ever deeper into debt. Again, that's not particularly encouraging.

[1] - http://www.businessinsider.com/pisa-worldwide-ranking-of-mat...

[2] - https://en.wikipedia.org/wiki/List_of_countries_by_spending_...

It is silly to compare the absolute expenses for education in different countries, you have to somehow normalize for example the teachers wages with respect to the purchasing power, since it is much cheaper to live in Vietnam compared to the US in absolute numbers. That is not to say that most likely something cultural leads to the poor performance of US high school education.

According to J.Simons (Fields medalist turned hedge Fond billionaire) especially in STEM fields Schools compete with tech companies for talent and can only offer much worse compensation.

The other thing is that in the 50-70ties the number of people that studied in preparation for and went to college was somewhere between 8-15% (continuously rising) it is much easier to teach smart students with few good teachers than to prepare basically everyone for college.

In Germany my parents almost exclusively had PhDs as their teachers, now 60% of all students prepare for university and we have a shortfall of ~20000 teachers with half of the STEM education majors going to industry.

To ensure there's no fundamental confusion, the terms you're talking about are "nominal" and "parity adjusted", which are what I gave. Nominal is the "absolute" cost of something. Parity is the adjusted value after compensating for how much things cost in a given region. You seem to be proposing that perhaps teachers in Vietnam are paid well relative to other jobs in Vietnam. This is not the case. A fairly recent government study indicated that some 50% [1] of teachers regret deciding to teach as a career, with the article going into detail on the lifestyle of a teacher - which is horrible, in large part due to dreadfully low compensation. PISA measures the performance of 15 year old students, so that is another topic altogether.

This is why Vietnam is such an interesting case study. Like many things, our spending is driven more by intuition than data. And Vietnam shows that our intuition on successful educational outcomes is pretty much useless.

[1] - http://english.vietnamnet.vn/fms/education/25476/50-percent-...

Given that education expenditure is mostly local (rather than, say, paying for imported commodities) there is little reason to compare dollar amounts.

> This is really one of the fundamental problems with government. Everything is seen through the lens of money.

That is the problem with government? I'd say this is the problem with a culture that sees everything outside the most personal through an economic lens. Government is not the exception here.

See [1] for a response on relative dollar comparisons.

To elaborate on what I mean by seeing things through an economic lens, imagine you see a problem that you need to fix. As this problem directly affects you, you're going to make sure that what you're doing is extremely likely to lead to a solution. And since you're also personally paying for it, you're going to keep costs as low as you possibly can. Your focus is on the solution and on minimizing costs. When government, high level or federal government in particular, solves problems they're taking on issues that frequently do not directly affect them. And they're spending other peoples' money. This leads to a rather broken system of motivations. Whether the prices involved are reasonable, or whether it's likely to lead to productive outcomes are not as important. Instead only the spending of money is seen as their action and role.

I think an interesting 'parable' for government spending is Alaska. Like you may know Alaska is the only state with something like a basic income. They have their permanent fund [2] which each year pays out a substantial dividend to every single man, woman, and child living in the state. It reached as high as $2,700 in 2018 'kind of', but where did it come from? Massive oil reserves were confirmed in Alaska in the late 60s and the state immediately set to leasing access to these fields. It resulted in a great windfall of money like nothing before or since. And what happened to the state as a result of the newly enriched government? Well... not much. Somehow the government managed to waste all their new revenue without much of anything to show for it.

Outrage within the state is what led then to the creation of the Alaska Permanent Fund. It is a privately managed fund which receives and invests a certain amount of money from all oil revenue and then distributes those profits back to society. The euphemism for its purpose is to 'ensure future generations will have access to the wealth long after the oil reserves are gone.' In reality, it's about letting society actually have access to the wealth created from the natural resources of their state instead of letting the government waste it all.

That alone is perhaps an interesting tale, but I think the most recent years are what really make the point. In recent years Alaska's government has been running their state into a dangerous deficit. Rather than adjusting their spending or trying to trim down waste or excess, they've turned to plundering dividends. I mentioned that $2,700 in 2018 as 'kind of'. The reason is that the state instead decided to make it $1,600 - effectively and legally stealing $1,100 from each man, woman, and child because they can't responsibly manage their own spending. Perhaps the dangers of having such a program in government control to start with.

I have absolutely 0 problems with some fair portion of my money being used as a means to help better society as a whole. But government does not really seem to be a body capable of achieving this end. And the problem, as I see it, is that government is more interested in throwing money at problems rather than ensuring that those problems are solved. I think the physically closer we get to problems (federal < state < county < city < distict < community < family < individual) the more likely problems are to be solved effectively, efficiently, and rapidly.

[1] - https://news.ycombinator.com/item?id=17600782

[2] - https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

New York and California were not high tax states when they build the foundation of their wealth.

And taxes aren’t an investment, and neither is most government spending. Most government spending is actually diverted to connected insiders.

[citation needed]

California was not a high tax/investment state when SV was built and has boomed? New York wasn't during the boom of the financial industry (1980-now)?

I could believe the first. Income taxes became high in California only after Proposition 13. New York on the other hand has been the largest US city since the colonial era.

> Income taxes became high in California only after Proposition 13.

Do you know of any data? I looked quickly online but with no luck.

> New York on the other hand has been the largest US city since the colonial era.

How is that related to tax rates?

But before then, weren't property taxes high?

California was booming so hard in the 1950s that within a single decade three MLB teams moved there, two directly from New York City, and California got another as an expansion franchise.

This was well before Silicon Valley was anything, well before the "traitorous eight". California's economy was growing like topsy from before the early Hollywood days in the 1920s. San Francisco was an immensely wealthy city before then, because of the gold rush.

Even today California's economy is so huge that Silicon Valley is only a small slice of it.

> While nobody likes the cost of investment, our lives and prosperity and everything else depends on it.

Yes, taxes are an investment. In the same way that putting money in your savings account is also an investment. But I wouldn't recommend that anyone keep all their money in a savings account.

Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested.

So higher taxes is not higher investment. It is a reduction in private investment, in exchange for a increase in public investment. Whether the world needs more private or more public investment is a matter of debate.

> For example, nobody would suggest you minimize investment in your home unless you were leaving soon

Well, that depends. If my choice is between paying off my credit cards, or investing in my house, I certainly believe that paying off my credit cards would be a better investment. Every dollar that I personally invest in my home is one less dollar that I am able to invest elsewhere. And those other investments may be a more pressing concern. Or they might not.

Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people.

I believe that it is OK to take some money from people, but certainly not all of it, regardless of how much better the public investment is. What that level should be is matter of debate.

To take it to the extreme, even IF the government had some amazing investment that was better than all private investments, I would STILL oppose it if the government decided to take a full 100% of money from everyone.

This is because I believe in private property, and that people are entitled to at least SOME of the profits of their efforts.

> Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested.

Indeed - because it's not necessarily an investment for one's own maximum gain - it's an investment in communal infrastructure where, yes, others might profit more from than you. However, in return, you might also profit from the contributions of others.

> Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people.

If we're starting with moral questions we should also discuss how morally justifiable it is to raise the price on products which buyers absolutely need but where they don't have an alternative. (E.g., recent pharmaceutical price hikes). This seems just as well "taking money from other people", except that it's done without any justification at all and, unlike taxes, you don't even in theory have any say about how high the prices should go or how the money is spent.

> I believe that it is OK to take some money from people, but certainly not all of it

Who was even proposing that?

My example of taking 100% of people's money is an extreme example that demonstrates the moral dilemma of taking other people money, regardless of how good the investment is.

The OP phrased taxes as an investment, similar to how one would "invest in their home".

And the comparison is not exactly valid. When I think of "investing", I think of taking my own money and putting it somewhere, not taking other people's money.

> Indeed - because it's not necessarily an investment for one's own maximum gain

Or maybe it doesn't maximize anything. Maybe other people are able to invest it better. Just because something is an investment, doesn't mean it is the BEST investment for society. And you always have to take into account that this "investment" is taking away money from other people, who might very well be doing something better for the world with it.

> When I think of "investing", I think of taking my own money and putting it somewhere, not taking other people's money.

I think you make good points, but I disagree here: Almost all investing involves pooling money with others, including all banking, most business, and almost all financial instruments. When you buy your own house, unless you pay cash you borrow from the bank, which involves money from the bank's other customers being invested in your house.

> Indeed - because it's not necessarily an investment for one's own maximum gain - it's an investment in communal infrastructure where, yes, others might profit more from than you. However, in return, you might also profit from the contributions of others.

You're assuming that tax money centrally invested will yield more returns to the community as a whole than it would were it invested by each individual. We've got decades of research to demonstrate that's not true.

We probably need to fund some services communally, despite some of the enthusiastic & interesting proposals of anarchists like David Friedman. We may also need to investigate some form of universal basic income so that everyone has enough money to spend & invest as he desires. We probably also need to have some sort of information safety net to prevent parasitic 'investment' opportunities.

But in general, a single centralised entity just doesn't have the information to make wise decisions about the utility of all investments across all citizens.

> We've got decades of research to demonstrate that's not true.

I'd be very surprised if any research supported such a blanket statement. Can you cite it?

Good points. However, I think that there is large omission form that economic model:

Non-tax money is not all invested. In fact, Americans have a low savings rate and tend to spend most of their money on consumption.

That's their choice, of course, and doesn't by itself justify government investment. It does create more demand and need for government investment.

More investment is not a uniformly good thing, any more than increased consumption is uniformly beneficial. Not only does it matter what you invest in—and government does not exactly have a stellar track record when it comes to choosing investments so as to maximize ROI—there is also a balance to be struck between investment and consumption. Favoring either one over the other through political means moves us away from the optimum balance, and over-investment (and malinvestment) can be just as destructive as over-consumption.

> More investment is not a uniformly good thing

Nothing in my post said it was.

> government does not exactly have a stellar track record when it comes to choosing investments so as to maximize ROI

Who does?