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Comment by pas | Hacker News Reader

Positive ROI spending promotes growth.

For example paying for unemployment benefits and end-of-life healthcare just gets consumed. Similarly increasing military spending and having people just live on bases likely has a very negative ROI (as it removes people from the labor market).

The argument is that the government is in a unique position to fund infrastructure projects and do long-term investment in underfunded sectors. (Very high expected ROI, because - by definition - these are areas where some money goes a long way, that's what underfunded means, right? But simply maintaining a very large welfare state while economic productivity is bad is ... you won't believe it, but it's bad and unsustainable.)

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Governments don't know what has positive ROI... because they don't care about it. Private companies would go down if they do projects with negative ROI.

Tell me the incentives and I'll tell you the result.

> Private companies would go down if they do projects with negative ROI.

private companies indeed go bankrupt all the time.

> Governments [don't care]

many governments care.

see the table on the second page https://www.oecd-ilibrary.org/cost-benefit-analysis-of-inves...

> Governments don't know what has positive ROI

and? no one knows with absolute certainty.

we should prefer market based solutions when they work, and we should work on making markets applicable to as many problems as possible, and we should definitely keep an eye on the usual regulatory capture problems (revolving door, incumbents lobbying to keep competition out, etc..)

markets work when the playing field is clear and equal. (for example global trade works if the seas are clear of pirates, and when there are mechanisms to keep rate of counterfeiting low enough to have trust between consumers and producers.)

https://marginalrevolution.com/marginalrevolution/2020/01/wh...

Every function that the government is doing, was done (better) at some point by private enterprises.

About levelling the playing field, the problem is regulation in general. Monopolies are only bad if they are supported by violence=governments (for example you could consider Google a monopoly but it's a market based one). You don't need a lot of competition, just remove all regulatory barriers to entry/exit (note: barriers to exit are also important).

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