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> that's what loans are for

Upthread: "interest free loan of 15k" https://news.ycombinator.com/item?id=48904009

Loans for non-trivially profitable investments don't require government interest subsidies.

Well...

>>> If it has a $100/mo loan payment and saves $150/mo on the electric bill then you take out a loan or buy it on an installment plan and don't need to have any accumulated capital in order to do it.

This depends on whether you'll pay back the loan. Just because paying the loan back saves you $50 / month forever starting immediately doesn't mean you'll do it. You might be the kind of person who takes out a loan, spends all your money on something else, and lets the bills go unpaid.

If you aren't that kind of person, you probably do have some accumulated capital.

But if you are, just the fact that the loan is hugely profitable and you should be able to pay it back - if you were a completely different person - doesn't mean you'll be able to get the loan. You shouldn't be able to get the loan, because you won't pay it back.

> You shouldn't be able to get the loan, because you won't pay it back.

In which case you shouldn't be able to get the loan regardless of an interest subsidy, because you won't pay it back.

The recipient doesn't necessarily know ahead of time how profitable the investment will be. Risk aversion will cause them to avoid investments that are profitable in expectation if they believe the chance of ending up worse off is too high. By offering interest-free loans, the government can pool that risk so that individual loan recipients hesitate less to make the positive-expectation investment.

> The recipient doesn't necessarily know ahead of time how profitable the investment will be.

Neither does the government.

> Risk aversion will cause them to avoid investments that are profitable in expectation if they believe the chance of ending up worse off is too high.

Risk aversion works both ways. The risk of not making the investment is that electricity prices in the evening get too high and then you have to pay them. If you install the batteries then you have a known fixed loan payment. If you don't you have an unpredictable variable electric bill. Which one triggers more risk aversion?

> By offering interest-free loans, the government can pool that risk

Risk pools don't work for correlated risk. The primary financial risk is that too many people install batteries -- which subsidies make more likely -- causing the price differential between various times of day to become too small to justify the investment. And that can happen even with interest subsidies. So then you have the government expending tax money to not just cause the people who would have installed them anyway to end up underwater, but to increase the number of such people.

... for purchases from "approved" "accredited" suppliers[]. AKA the interest differential is regressive tax to funnel money to favored suppliers. Notice there's no option for the poor to simply install it themselves, which would save them more money than an interest free loan, but wouldn't funnel money to rich government approved install contractors.

And there's your grift. As soon as the home owner wants to allocate the "profit" of install to themselves, it is a swift kick in the ass but that will go to our buddies, and thank you very much for your taxes.

[] https://www.energy.nsw.gov.au/households/grants-rebates/home...

> Except that there is no additional money, its just your own money but now there are strings.

I understand what you mean, and yeah, "it's just your money", but also, it really isn't. Poor people have to pay taxes, no way around it, getting them back as subsidies is still better for them than not getting it back at all. The choice isn't "Keep the money or have subsidies", the choice is "The money goes to other stuff or get subsidies".

> On top of that, that still isn't necessary for things that save a non-trivial amount of money, because that's what loans are for. If it has a $100/mo loan payment and saves $150/mo on the electric bill then you take out a loan or buy it on an installment plan and don't need to have any accumulated capital in order to do it.

Are those interest-free or managed by for-profit entities? Because "loans" are vastly different things compared to subsidies, but I'm guessing you already knew this.

> Why would anybody want that either, instead of just not taking it from you to begin with?

Because "not taking it from you to begin with" isn't a practical and realistic alternative, that's not how the world, and especially taxes and government works...

> The choice isn't "Keep the money or have subsidies", the choice is "The money goes to other stuff or get subsidies".

That's the false dichotomy that happens in a broken government, but then why hold that out as something desirable?

> Are those interest-free or managed by for-profit entities?

Is the larger amount of mortgage or car loan debt they have to carry when they pay the extra money in tax?

> Because "not taking it from you to begin with" isn't a practical and realistic alternative, that's not how the world, and especially taxes and government works...

Your argument seems to be that lowering taxes on ordinary people is impossible?

> That's the false dichotomy that happens in a broken government, but then why hold that out as something desirable?

Personally I see it as stuff that happens in countries where the government care about the well-being of all, not just a select few (usually the ones with the most money). It's desirable that society improves, lots of that happens because of tax money. Subsidies usually means re-allocating funds, not raising taxes, although that might happen over time. Still, increasing taxes isn't inherently bad, especially when used for good. But I also know this is a somewhat controversial point of view in many hyper-capitalistic societies.

> Your argument seems to be that lowering taxes on ordinary people is impossible?

Yeah sure, I'm also clearly arguing for murdering children. Fun discussion, hope you'll enjoy the rest of your Tuesday :)

I'm honestly having trouble comprehending what your position is supposed to be here. It really seems to be that using the money to lower taxes on ordinary people rather than providing them with subsidies is a thing that could never happen. As if the prospect that their taxes could be lower than they are now, rather than only the same or higher, is something you can't even imagine.

Well off people do not allocate capital in a way that's socially or economically (on a national level) optimal. So the government has to do that for them (even if those who the majority of taxes personally benefit less from that than if they were allowed to keep that money).

I don't think that's entirely unreasonable. After all there are hardly any personal incentives for individuals to invest into infrastructure, education or healthcare of people who can't afford it and plenty of other areas even if that's what allowed them to accumulate a significant proportion of not the overwhelming majority of their wealth over the long term.

> Well off people do not allocate capital in a way that's socially or economically (on a national level) optimal. So the government has to do that for them (even if those who the majority of taxes personally benefit less from that than if they were allowed to keep that money).

But we're talking about a government subsidy for something people do have a personal incentive to invest in.

On top of that, the misalignment of incentives applies even more to government officials, who have perverse incentives to enrich cronies, make inefficient transfers to special interests in a specific range of "not currently voting for them but close enough to the line to be worth paying off" at the expense of the public at large, or just not care about getting a given thing right because their position is being secured by something unrelated.

If there's hardly any individual desire, as you say, to fund the development of the poor then taxes in that pursuit are illegitimate under a theory taxation happens by the assent of the people (even if only roughly a majority or their representatives).

Given that most taxation done with the the advertised goal of helping the poor in Australia does happen with popular assent of individuals, I would theorize your position is false and that people do have some individual incentives to develop services offered to the poor -- for profit, humanitarian / charitable reasons, and a variety of other considerations.

> have some individual incentives to develop services offered to the poor

I never said that wasn't the case but historically that "some" was never sufficient. On average people are rational and selfish to a larger extent than they are altruistic.

> taxes in that pursuit are illegitimate under a theory taxation happens by the assent of the people

Well the whole concept of an organized society falls apart if individuals can personally freely chose which laws to obey and which taxes to pay. You have to have a balance based on a reasonable consensus, otherwise you end up with totalitarianism or anarchy (and in that case the people who have the means and resources to do that will establish alternative power structures and will end up subjugating those who do not AND also outcompete those how have the means but are unwilling to do the same).

No, I'm not talking about picking and choosing for a voted tax. I'm saying it can't be true most people don't want to help fund the poor if the majority are voting to tax themselves to fund the poor. Clearly under anything remotely resembling the Australian representation of what they claim their representative democracy is, the majority of people already decided they individually are incentivized to help the poor develop infrastructure.

It can't simultaneously be true that most don't want to help the poor at their own cost while also the tax has been legitimized by the majority wanting to help the poor at their own cost. Only individuals or representatives elected by individuals can vote and if their incentive was to not help the poor then they'd vote not to and that would be that.

> I'm saying it can't be true most people don't want to help fund the poor if the majority are voting to tax themselves to fund the poor.

Or people have a tendence to perceive a system where everyone is required to pay their "fair share" as more just and are more willing to (often begrudgingly) participate in it. If the system was fully voluntary the average contribution would be significantly lower that it is now. Also a significant proportion might feel they benefit from this system more than they pay into it (or are risk averse and prefer having the safety net even if they contribute more than they benefit)

> decided they individually are incentivized to help the poor develop infrastructure

Well I'm generally vaguely incentivized to help the poor and develop infrastructure. Would I be willing to voluntary give up 40% of my income to do that rather than a significantly lower proportion? No, of course not. When it comes to infrastructure I'd be willing to pay very little or nothing at all if I know my neighbour isn't contributing anything. I don't think the average person would behave particularly differently than me.

I can tell you you're absolutely wrong about the average person. I live in a place with no public infrastructure (I'm talking about, not even public roads, and not some rich HOA, a ~poor unorganized community without any infrastructure association) which has allowed me to view how average people react when there is no taxation based infrastructure. When it breaks, the neighbors help. I help maintain the roads for my poor neighbor. My other neighbor helped fix my water line when it broke. Sometimes I take my heavy equipment and donate labor to prepare for storms, etc. The infrastructure is literally donation based. We get it done for a tiny fraction of what the tax based system cost and everyone is far better off, even if the amount donated is less than what the taxes would be and some people "cheat" the system.

It's actually quite rare to find someone who says I will help the poor, but only if my neighbor also pays, otherwise they can get fucked. This is very bizarre thinking. The people in my basically ancap-dystopia neighborhood don't even behave in this sadistic way. It honestly sounds more like a manufactured "gotcha" to win an argument than a way someone would think.

In reality the fraction people that would vote to tax themselves, are more than willing to donate in the case they don't get the tax, your sadistic MAD view where you punish the poor just because some other guy didn't help too is relatively rare and not indicative of the mindset of most people who are voting to help the poor. I honestly think that most anyone who would vote for the tax, does not act that way when dropped in a neighborhood like mine, and you probably would not either.

> It's actually quite rare to find someone who says I will help the poor, but only if my neighbour also pays, otherwise they can get fucked

You are seeing all of this in a very, very black and white way. It's about how much the average person is willing (or forced to) to contribute in either system especially when you try to scale it up to hundreds of thousands or millions of people. Libertarianism is an utopian ideology not particularly different to Communism in the sense that both are incompatible with human nature.

I mean there is simply no empirical evidence this approach scales beyond small high trust (usually homogeneous) communities. Tragedy of the commons is a thing.

> your sadistic MAD view where you punish the poor

That's extremely reductive... and you are making this way too personal than it should be ; )

Well that would apply to a lot of thing governments spend money on. I think the idea is that governments are better at allocating capital in certain cases (obviously one might disagree with that) than the people/companies who generate the most tax revenue. I mean on an individual level even if solar batteries are profitable people who have sufficient disposable income might chose to invest it into the US stock market (if it still offers better returns) amongst other things than into something that benefits the Australian economy or society.