In today's LA TIMES, there's a story about the US government's purchase of
its bonds (as part of the "paying down" of its debt). Because it can't
always do so (since sellers must be willing to sell and will often wait
until the bonds mature), the government needs somewhere to "park" its
dollars from the budget surplus until sellers are ready. Can it park those
bucks in private stocks or bonds?
The TIMES quotes pen-l's Brad deLong, former assistant (under? associate?)
secretary of the US Treasury. "This is where things get weird. The idea of
the government directly investing in American businesses is territory we
really don't want to get into."
I think this is an accurate statement, given the balance of political and
economic power. "We" (those with a lot of political clout) don't want
democratically-elected officials or their subordinates choosing which
stocks or index funds to buy.
The reason I bring this up is because George W. Bush was quoted the other
day saying that the government can't claim credit for the booming "new
economy" because the government doesn't do the investment. Maybe, but the
reason is because the political balance of power rules that out, while W.
and his buddies are part of the charge to keep the government from doing so.
W. was wrong, however, when he said that the government wasn't involved in
the research. Even though Al Bore didn't invent the Internet, it was
government-sponsored basic research (including that by the Pentagon) that
formed the basis for the private research and development. The government
does or subsidizes the nonprofitable or money-losing research (and gets
blamed when it suffers from budget deficits) while the "private sector"
hogs the profitable research (and gets praised for being so profitable).
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~JDevine
