• 526 Days Ago
• 08/30/2010

Re: The Intangibles

But what about government's impact on the economy?
Do you know how much R&D is done by the government and then put into practice by private companies?

Hard to say, yes Government does the R&D that most companies will not do because being deemed to risky. Some of this is understandable, example a company most likely will not spend their R&D money on fusion reactor if it will take 40 years or longer to see a return on investment, if ever. That's not the reason companies are made.
I have to add that most companies look to less risky short return on investments instead of long term riskier returns due to litigation issues, companies already pay billions in litigation costs whenever something goes wrong. Imagine the litigation if a privately run space shuttle blew up over Texas, the company wouldn't last long. You want companies to spend more on riskier R&D, cut down on litigation.
And yes companies do spend a lot on R&D in the U.S,

In the U.S., a typical ratio of research and development for an industrial company is about 3.5% of revenues. A high technology company such as a computer manufacturer might spend 7%. Although Allergan (a biotech company) tops the spending table 43.4% investment, anything over 15% is remarkable and usually gains a reputation for being a high technology company. Companies in this category include pharmaceutical companies such as Merck & Co. (14.1%) or Novartis (15.1%), and engineering companies like Ericsson (24.9%).[3] Such companies are often seen as poor credit risks because their spending ratios are so unusual.
This from Wikipedia.

Let's look at the social programs - cut social security? Medicare / medicaid?

Well if it wasn't for Government and poor management that they have of both Medicare and Medicaid as well as Social Security, we wouldn't be in the issue we are today. I say make the medical system more competitive, open cross-state border between medical insurance companies, you will see cost fall considerably.

Going back to the deficit, I happen to believe most of the bail outs were necessary to avoid a complete collapse of the world economy.
Anyone who doesn't believe this has their head in the sand.

Sorry but I don't, I work in government as an Engineer, though I have a physics degree as well as EE degree. I have seen more of the worst, companies that should have failed because of poor management or poor execution, on and on. Other companies that would have stepped in and been more successful have to wait, because after all once the spending stops the companies will then go under. We're just delaying the inevitable when we have bail outs.
Cut taxes and you will see the economy rebound.
Cutting taxes will actually increase the money the Government is bringing in, it increases the tax base.

And those bail outs really angered me because I have an 800 credit score and have managed my money responsibly.
But here I am, bailing out those who were greedy and / or just plain stupid.

Oh I agree whole heartily! I have excellent credit as well, my wife and I are financially responsible, we don't buy on credit unless we have the money already. I don't think we should bail out anyone! Let them fail and someone (company) who is smart enough to do it right should take their place.