Comment by roymurdock | Hacker News Reader

Comment by roymurdock | Hacker News Reader

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Bonds are government debt. When you buy a bond, you are giving the government your money now in order to receive a return on that money later, with the expectation that the government will do something useful with the money in the meantime. So if the government is allocating its budget well, then yes, purchasing bonds is a good thing. If it is not, you are making a bad loan to someone who may not be able to pay you back in the future.

Government stimulates demand by investing in sectors that have huge up-front costs but large positive social externalities over time because the lifespan of a gov is much greater than that of an individual or corporation. It invests in infrastructure - the national grid, highways, roads, prisons, the post office, mortgage lending, insurance - most importantly though, wars, education, and healthcare. Many of these industries have become increasingly privatized over the past 30 years. This is not inherently bad, but it changes the profit time horizon and shifts incentives away from long-term investment towards short-term profit maximization.

iPhone would not exist without the development of the internet during the cold war on gov grants, the affordability and draw of public UC Berkley where Jobs and Wozniaki met, people alive and well-fed enough to buy it, etc. You can't point to a single innovation without looking at the entire fabric of the society that produced it. Gov spending has huge impact on social fabric. iPhone is also only one half of equation. If no one has the disposable income to buy one, it doesn't matter how good it is.

> iPhone would not exist without the development of the internet during the cold war on gov grant

Isn't that a bit of a broken-window fallacy, though? We can see that the iPhone exists, and we can see that it exists in part as a result of the State grants which funded the development of the Internet, but we can't see what that money might have funded had it not been spent on those grants. We have no way of knowing what the original earners of those dollars might have chosen to invest them in, and what the world would now look like had they been free to do so.

We do know from history that while socialist economies like the USSR and its satellites did indeed tend to improve their economies measurably over their pre-socialist levels, freer governments tended to improve their economies to an even greater degree, leading to exponential quality-of-life differences over the decades. The average Russian was better off in 1989 than he would have been in 1913, as was the average American, but that average American was so much better off than the very best-off Russians that Boris Yeltsin was converted simply by seeing a Houston grocery store[1].

I love the Internet deeply, and I'm glad that government grants financed the research which led to it, but I wonder what else I might have had if those grants had been spent otherwise, just as a Russian in 1989 was no doubt glad for what he had — and amazed when he saw what he could have had.

[1] http://blog.chron.com/thetexican/2014/04/when-boris-yeltsin-...

>> Isn't investing in bonds putting money to work in the economy?

> Bonds are government debt ...

Could be referring to corporate bonds.

Either one. The money still gets into the economy.

Didn't Jobs quit college because it was too expensive?

> the affordability and draw of public UC Berkley where Jobs and Wozniaki met.

Didn't Jobs quit college because it was too expensive?

No, most colleges were extraordinarily inexpensive at the time Jobs was going. You could pay for it entirely with a part-time job.

In his famous Stanford commencement speech he said he quit because it was too expensive.

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