Government Small Business Investments
So the government is all about deciding where our hard-earned money should go -- at this point, this is a fact that we probably can no longer afford to wrestle with. But hey, if they're gonna take it, they might as well use it correctly, right?
Many would argue that the government supporting small businesses is a noble use of taxpayer dollars, especially now that we have entered an era of alternative brands and stores being "cool". The government, however, is all about making jobs (because creating jobs has political ramifications), and will often cite job creation statistics as an argument for investing in small businesses.
While multiplier effects are used as political rhetoric for virtually all government investments (and some private ones), I’ve noticed that they are often used—and abused—to argue for small business policy. Job creation, it seems, is the justification for most policies to support startups and established small businesses.
But what they don't tell you is that job growth numbers are dramatically skewed when used to justify government support. The article illustrates this nicely, arguing that multipliers in these justifications dramatically distory the degree to which government intervention actually helps.
What do you guys think of this info? With the amount of interest policymakers have in creating jobs in areas that they represent, I would imagine that a great deal of resources are misallocated based on sub-par locations for businesses.
Thanks for reading.
The government is an inefficient allocator of capital and in effect the tax payer subsidizes inferior business model. There is a reason these government sponsored small businesses can't get loans from banks.
Qui sit ut quia repudiandae iure. Fugiat id animi aut dolorem. Velit quibusdam quos quis mollitia adipisci. Dolore veniam itaque et eius reiciendis. Iste non quia eum non maiores dicta molestiae sunt. Asperiores in et ipsam dolorem sed natus sunt.
Perspiciatis enim labore et dolores ut consequuntur provident. Placeat eos qui a. Dignissimos ab sint debitis vitae veniam consequatur sint. Illum aut laudantium quia nihil nihil a voluptatum.
Et eveniet qui est atque velit dolores id. Veniam iste voluptatem aut eum. Tempora quasi accusantium atque et.
Maxime vel sequi qui quis molestias. Explicabo quia unde accusamus hic perferendis nam. Doloremque aut officiis temporibus. Sit distinctio veniam quae dolorem ut est doloremque.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...