It’s Redistribution, Not Stimulus

I guess it:

1. Puts more money into the economy which increases the money base (i.e. some of that money is deposited at local banks and then lent out for other projects)

2. Gives people greater access to the internet which benefits the people and firms that they make purchases from.

3. Gives people greater access to the information on the internet which allow them to use public information to improve their lives and possibly to innovate and contribute their own ideas that improve everyone lives. (i.e it increases the pool of people that have access to information and that can share their ideas).

Cliff,
You’re missing a few fundamental distinctions between private investment and gov’t spending.

First, every dollar the gov’t spends must come from the private, wealth generating sector. That is, federal spending occurs at the expense of private investment. As gov’t spending increases, the private sector shrinks and gets crowded out.

Second, as each tax dollar is processed from our paycheck to the IRS to federally funded projects, the value is reduced due to bureaucratic waste. The “increased money base” is a fraction of what it would be had it been left in the hands of the citizens.

Third, individual investors are exponentially more sensitive to their investments than third party gov’t bureaucrats. Private investors are keenly aware of each dollar they invest, spend, donate, etc. precisely because it’s their money to grow or lose. The gov’t, on the other hand, lacks this regulating mechanism. If their projects fail or loss money, there is seldom any repercussion for their poor decisions.

Fourth, if the demand exists, private investors can accomplish nearly anything the gov’t can in less time, for fewer dollars, with better quality and less frequent raids on our wallets. If the demand is lacking, who is the gov’t to tell us otherwise? Free markets are wonderfully efficient and productive things when allowed to flourish.

I’m not particularly confident in the government’s ability wisely to choose public works projects. However, given the hundreds of billions we spend yearly on our ridiculously overbuilt transportation system (and even now I can hear the whining, “but I grew up with that, so I’m used to the government support!” — relax, I don’t want to take away anyone’s highway), and the fact that the current decision-makers are committed to spending money, they could do worse than spending it on local IP data connection. The free-market objections don’t work here, since the USA hasn’t had anything approaching a free market in telecom at the local, state, or national level since 1934 at the latest. Even if one is per se suspicious of “public” investment decisions, it is surely an improvement to diversify a bit? (If you are a fan of free markets, then that’s exactly what you’ll see in the interconnection market once the first/last mile is disintermediated from the long-haul. That battle is being fought on several fronts, but this new public spending is certainly a part of it.)

Local data connection and highways both have a better claim to public funding than other public resources that are only useful to small fractions of the population. Both highways and IP connectivity constitute an open public space that is useful in a wide variety of activities by a wide variety of actors, because both are engineered that way. This is in stark contrast to the technologies they replaced, railroads and POTS networks. Even more than the interstate highway system made possible our thriving truck shipping market, fast always-on ubiquitous unencumbered wired IP connection has enormous potential to create new markets and improve consumer choice.

Your posts are so funny. If we had done it your way we would not have the Internet at all. You would still be waiting for the first company to start the Internet and claim that there clearly was no need for the Internet. After all, no company had invested in it yet. Right?