The Motley Fool Discussion Boards

Previous Page

Investment Analysis Clubs / Macro Economic Trends and Risks


Subject:  Re: Here's your chance: Balance the Fed budget Date:  1/2/2007  3:17 PM
Author:  Dwdonhoff Number:  200165 of 603176

Hi Capitan,

Hope you'll forgive me for not having the time to participate in a point-by-point unfolding... I'll just cover three issues;

GOVERNMENT spending cuts do not result in aggregate lost profits AT ALL.
If you can convince a Boeing shareholders meeting with your theories, I'll eat my hat and yours. Did you buy a fighter jet with your recent tax break?

Note that I said "aggregate." I intentionally chose NOT to micro-focus. You ignored that, and highlighted a single company (that sucks hugely off the government... but certainly does not need to.)

Of course, this discussion hinges on the notion that markets allocate resources better than bureacracies. Corporations may suck because they behave too much like mini-states.

Agreed to point one, and conditionally agree to point two (WHEN corporations behave too much like mini-states... which, by your own insinuated admission, is a negative behaviour anyway.)

Hedge funds then should be much better, since they are pure market players with little bureacracy, always taking their orders from the market directly. Could you please give me a list of the five most important technologies that were created thanks to the foresight and profit seeking of hedge funds?

Hedge funds do not CREATE technologies, they FUND and provide the RESOURCES for them, and if I had the time it wouldn't take much at all to list a TON of technologies (from mundane to life-saving) that have been birthed and created by hedge-fund supported venture capital.

I'd go further to propose that the venture supported technology list would likely outpace the bureaucratic supported list by several multiples.

If he spends less, he will increase the savings rate and decrease the need for wasteful welfare.
Waste is necessary or the survival of the system.

I disagree that it is "necessary" however I would acknowledge that it is UNAVOIDABLE... in the same way that simple biological waste (amonia, etc) is an unavoidable reality in our physical living function.

We have too much stuff.

This is certainly a discretionary statement... but frankly, I will agree (in my own opinionated way! ;~) The market solves this by rewarding those who manage their resources better.

We have too much agricultural product,

While the market naturally solves this on it's own, we see a perpatuation of "too much agricultural product" thanks virtually entirely to government intrusion (subsidies... farm welfare...)

too many car factories,

The markets are certainly taking care of this problem easily enough.

too many gadget makers, too much retail space, too many houses.

Ditto market effectiveness.

Without waste, the profit rate will be 0 (Zero).

This is silly. Profit doesn't come from waste, it comes from a competitive delivery of unique value to the consumer of that value. If it were "waste" then it would not be demanded and paid for.

Which means either communism or depression (and most likely first depression and then communism)

You missed the procession of logic at the immediately previous wrong turn. The key is that Profit has no connection to Waste.

Copyright 1996-2020 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us