Are "Investment" and "Spending" the Same Thing?

For Republicans, (0.00 / 0)

You can only call it investment if it is done by a person or a corporation, even though it is exactly the same thing when done by a government.  

But if government does it, then it is inherently wrong and must be eliminated, according to their ideology.  That's the underlying reason why, for example, McDonnell wants to relinquish the commonwealth's control of the ABC stores.  Even though it was a good investment, providing a steady, consistent profit and revenue stream, the fact that the government does it blinds him to these realities.  

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by: frankoanderson @ Tue Jan 25, 2011 at 18:00:33 PM UTC

It is partisan rhetoric (0.00 / 0)

For instance, if McDonnell is serious about tacking transportation and higher education using borrowed money through bonds, to me, that is investing, even though it is a Republicans do it.  That is in part because I believe in Keynesian economics (although to a lesser extent at the state level than the federal) and believe that transportation and education pay long term financial dividends down the road.

If, however, someone hands out reckless tax cuts and expands the medicare prescription drug program simply to ensure a Republican majority for the next generation (I'm looking at you, Mr. Rove, and at you, Mr. Allen, for that vote....) then that is spending.  

And you don't have to be a Democrat to have done it.

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by: GretchenLaskas @ Tue Jan 25, 2011 at 18:04:34 PM UTC

According to my Public Budgeting professor (0.00 / 0)

It's either consumption or investment.  Welfare and food stamps are consumption.  It's hard to measure the ROI on investments but here's one example, according to a recent study at UVA:

For every tax dollar the state invests in public higher education, the result is more than $13 in increased economic output.
For every tax dollar the state invests in public higher education, the result is $1.39 in new state tax revenues.

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by: frankoanderson @ Tue Jan 25, 2011 at 18:30:01 PM UTC

So here's a question for you (0.00 / 0)

What's the "ROI" on defense spending?  Pretty hard to quantify. Also, is it more "investment" or "spending?" Do Republicans even care?

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by: lowkell @ Tue Jan 25, 2011 at 18:33:40 PM UTC

[ Parent ]

Oh, that's an exception to the rule. (0.00 / 0)

When it comes to defense, it's investment if a Republican does it.  But there's no measurement on ROI.

Bush has worked with the Republican Congress to double investment in missile defense systems to put America on track to field an operational system in 2004; dramatically increase R&D investments; commit a significant amount of the procurement budget to transformation; and pursue transformational programs across the services such as the Army's Future Combat System, the Navy's conversion of ballistic missile submarines to guided missile submarines, and the Air Force's unmanned combat aerial vehicles.  Source: 2004 Republican Party Platform, p. 19 Sep 7, 2004

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by: frankoanderson @ Tue Jan 25, 2011 at 19:06:26 PM UTC

[ Parent ]

But of course :) (0.00 / 0)

n/t

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by: lowkell @ Tue Jan 25, 2011 at 19:33:31 PM UTC

[ Parent ]

My definitions: (0.00 / 0)

Investment:  expanding and repairing a major interstate between two major cities.

Spending:  building "The Bridge to Nowhere" as a jobs program and nothing else.

Investment:  Higher education

Spending:  War in Iraq.

Investment means that you increases value and you have something to show for it.  Spending is something that ends up in a sewer or landfill, or as scrap somewhere.

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by: NotJohnSMosby @ Tue Jan 25, 2011 at 19:18:40 PM UTC

Although by definition (0.00 / 0)

all consumption/spending has some "utility" to the individual who purchased the good or service. However, some things you buy are far more clearly in the "investment" category, in that they provide low immediate utility but large long-term gain, while other things are far more "consumption" in that they provide mostly immediately utility but little if any long-term gain (or even a loss, in the case of junk food, cigarettes, carbon-based energy, other crap that's harmful to you in the long term).

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by: lowkell @ Tue Jan 25, 2011 at 19:43:01 PM UTC

[ Parent ]

Investing (0.00 / 0)

To me they are close to the same thing but sometimes especially in politics you need to re-phrase what you are saying even if little changes.

For example most people agree that you should live within your means and not spend what you don't have. However, not many people (especially those of us in NoVa) could afford to buy a house up-front or pay for our children's education up-front. These are investments that create future returns. Additionally if a road is seriously f'd up and endangers people you don't wait until you get the next year's appropriations, you fix it ASAP. These are investments. People can clearly relate to this and most sane people would agree that we need these investments. When you look at budgets these investments combined with necessary spending such as SS, Medicare, Medicade are such a huge chunk it really defies logic for what can be cut. Doesn't mean that the Tea Baggers won't try to say that they can balance the budget by cutting Congressional Pay (Robert Hurt) or Tort Reform (Just about all of them). Just makes it harder to say that I am going to cut "investments" when it is known to be education and infrastructure.  

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by: Cool_Arrow @ Tue Jan 25, 2011 at 19:23:01 PM UTC