Comments on: Is Uncle Sam ever truly an investor? http://blogs.reuters.com/christopher-papagianis/2012/05/02/is-uncle-sam-ever-truly-an-investor/ Thu, 18 Jul 2013 20:14:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: MBoulNZ http://blogs.reuters.com/christopher-papagianis/2012/05/02/is-uncle-sam-ever-truly-an-investor/#comment-15 Sun, 06 May 2012 20:52:55 +0000 http://blogs.reuters.com/christopher-papagianis/?p=14#comment-15 Don’t call them investments if you dont want to be held held to the same standards as any other investor. It’s a useful euphemism potlitically, but also very misleading.

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By: jtfane http://blogs.reuters.com/christopher-papagianis/2012/05/02/is-uncle-sam-ever-truly-an-investor/#comment-14 Sat, 05 May 2012 15:48:01 +0000 http://blogs.reuters.com/christopher-papagianis/?p=14#comment-14 I have to wonder if the author (and his references) actually missed the rather obvious elephant in their snake oil pointed out by @bcrawf above. I find it far more likely, though, that any reasonably intelligent individual would recognize that comparing any government to for profit corporations is a deeply flawed methodolgy from the outset. Governments have entirely different goals and objectives than for profit corporations and they cannot simply avoid risk by choosing not to “invest”. Had the financial system or the auto industry collapsed as a result of the financial crisis the government would have suffered far greater losses than the sums mentioned here. The oversimplification of viewing this situation as a simple business investment is absurd. Any reasonable financial assessment of the issue would obviously need to include the risk to the government of increased expenses that might be incurred as a result of the failure to provide support. Such risks would include increased unemployment benefits, food stamps, medicare and potentially increased security costs (like calling out the National Guard to suppress riots at recently shuttered auto plants) among many others. These are issues that businesses simply do not have to deal with. The other obvious risk for the government is revenue loss resulting from decreases in taxable income (both corporate and personal). Even given all of this one needs to accept that not only is profit not the sole objective of government (as it is for for profit corporations), it is not even AN objective of government. The government should be run in a fiscally responsible manner, this, however, does not imply that it should generate a profit.

I would expect this sort of ignorance from laymen who regularly make the tired old mistake of asserting that the government should manage it’s finances in the same fashion that they manage their own household finances. However, when I see these obviously flawed assertions and blatant omissions of critical issues put forth by purported professionals and experts I must assume that they are either intentionally deceptive or they are not the experts they claim to be. The aim here seems rather obvious, those who display their obvious lack of understanding of the complexity of government economics by asserting that government finances should be handled like household finances will likely be readily deceived by the equally flawed assertion that government finances should be handled like for profit business finances. So here’s a question for you Mr. Papagianis, did you actually completely miss this obvious issue, that the government inherently assumes the risk of the failure of these entities whether it decides to “invest” in them or not, or did you intentionally misrepresent the obvious criticality of this component of the discussion with the rather pathetic accusation that “Massad’s argument is fairly circular” an old debate tactic that can be used to make essentially any argument appear circular? And if so, how do you justify that decision?

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By: bcrawf http://blogs.reuters.com/christopher-papagianis/2012/05/02/is-uncle-sam-ever-truly-an-investor/#comment-13 Fri, 04 May 2012 13:38:11 +0000 http://blogs.reuters.com/christopher-papagianis/?p=14#comment-13 When the government bailed out “Detroit” (auto mfg. industry), it was weighing what would happen if it did not “invest.” In contrast, a private investor who decided not to invest, say in Detroit, would lose nothing if not investing. The private investor need consider only what gain or loss may be realized, but has no loss if not invested. Just because the government provided funds in a way that repayment could be made (an investment model) does not mean the bailout stands as a simple investment.

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