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Comment by qeternity | Hacker News Reader

You’ve missed the point entirely, as that is precisely my point. Merely hand waving it away and saying “it was spent on local construction companies” is not a sufficient argument.

It takes a hell of a lot to justify these sorts of investments and usually the ROI doesn’t materialize for the State.

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What the other person meant, I think, is that when you buy services from the companies, those companies then pay a 20% tax on profit to the state, additionally, all the salaries they pay to people also end up ta ed at 30-40%, so much of the labor cost will be returned to the state and only raw materials won't (but if they are sourced locally, the suppliers will also contribute some taxes). Don't know the exact division between labor and materials, but my armchair guess would be that 20% of the cost of factory will end up as tax paid to the state.

I know what they meant.

That doesn’t mean you can just argue a point without any sort of justification.

I think GP is prefectly well aware of what was meant, and their point still stands - you need to do a lot of careful analysis to actually claim any ROI for these kinds of government handouts, and the burden of proof is very firmly on those claiming the benefits. The history of these things is overwhelmingly that in the final tally, actual benefits fall far short of break even.

I don't feel comfortable with people just claiming that there's a positive ROI, but I feel the same about claiming "usually the ROI doesn’t materialize for the State" without anything to back it up.

>The history of these things is overwhelmingly that in the final tally, actual benefits fall far short of break even.

Do you have some source for this?

To expand on your point, the "ROI" for a state doesn’t have to be strictly financial. It can invest to improve employment rate, to establish itself as a production/business hub, etc.

No. All of those things can and must be translated into ROI. This is the only way to compare investments. Maybe there’s a different use of these funds that would yield greater impacts in those areas you mention.

I understand your point. But: fiscal balance is merely one of many goals a state has when it invests. There are also environmental concerns, questions of social equality and wellbeing. In other words: a state is not (only) a business. Not everything shows up on the balance sheet.

No, you don’t. I’m saying all of those things have return functions. Financial ROI is just one metric. However you define your environmental returns, you can calculate an environmental ROI and then compare that across projects.

Unfortunately the track record of government spending is pretty bad. I'd rather have that money go towards private entities with good a track record, to find solutions to things like the climate crisis and pollution.

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