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Discussion (39 Comments)Read Original on HackerNews
but i dont think "leave it up to the market" is a better idea. investments like this just need to be transparent, open to everyone and set up strict punishment for stealing the money with prison for executives.
if they wanted to actually create jobs they would support small companies and set up open competitive programs based on project quality. or start a state investment bank giving super low interest loans so factories can expand without cutting profitable divisions like in china.
Here's one example: https://www.dol.gov/newsroom/releases/osec/osec20250923
In Georgia, the employer is reimbursed $2,500 when an apprentice starts and up to $10,000 when they finish. They can also get up to 75% of the apprentice's hourly wage covered during their initial on-the-job training.
I'd rather they just lower our taxes and quit squandering our money on these programs that never work. I never once hear democrats looking to lower taxes or remove wasteful spending, it's practically encouraged. They defend SNAP recipients buying soda and candy even while admitting there's a correlation between SNAP recipients and having diabetes and being overweight. They do the wrong thing and know it and expect us to ignore that and keep funding these programs.
Would you support cutting military spending? It's a lot higher than other countries.
We should be using the government to help people and when we do, it often does a good job.
Examples: Roads, libraries, fire departments, schools, safety regulations…
This will never, ever happen. There will always be bonus points available, even if they're awarded to "conservative"-leaning feel-good attributes like veteran-owned sponsor businesses.
These investments are likely to always fail at their declared purpose. Better to put the money towards free childcare and maybe trying to convince parents to read to their kids.
Liberals in canada call that 'making housing affordable', https://www.cbc.ca/news/canada/british-columbia/prime-minist...
It feels that in Canada business is impossible unless it's directly funded by the government.
There doesn’t seem to be any lesson-learning happening, since governments keep trying this despite the outcome always being the same.
Which would indicate that creating jobs was not the actual reason for the grants. Given how trivially easy it would be fix the problem (simply make the grant contingent on the creation of jobs, otherwise it converts to a loan), the real purpose is probably a matter of generating headlines and raking in campaign contributions (with occasional full-on kickbacks probably happening as well). All of which it apparently does well enough that politicians continue to do it.
/s
The two largest projects are still under construction, so it might be too early to make any conclusions.
> All told, the governor said that her major subsidy projects would create 20,595 jobs in Michigan
Even using these numbers that works out to $135k/job, which is bonkers!
> Ford, meanwhile, lowered its job creation estimate from 2,500 to 1,700, though so far it has created zero, and received no state money, as the building is still under construction. The state did, however, spend another $780 million on site preparation.
Most of the claims in the article are slightly obfuscated as to which actually involved any real net cash flow. Even the bottom line:
> Of the $2.7 billion offered, $1.8 billion has been spent—transferred either to companies or to local economic development agencies.
Doesn't make it clear what the local economic development agencies actually did with it - whether the projects were otherwise necessary, etc. Some of the spending was likely defensible even if the originally intended project fell through. Lots of it probably wasn't defensible. Michigan (and every other state) gives a lot of money to 'developers' in ways that don't look great if you bother to look into it at all.
Michigan's state budget probably totaled ~$700 billion over the past 8 years. So this accounts for up to 0.2% of the budget.
Apparently their tax system is quite favorable to businesses, but taxes are only one (small) part of the equation. The taxes matter more once a company is making a lot of money.
In short, tax incentives and random per company “investments” (bribes?) are not enough to offset certain laws and regulations Michigan has.
I am not saying those laws and regulations are bad. I am just saying that targeted tax incentives and investment for specific companies are the wrong way to solve the problem.
“We won’t collect additional property taxes on this new thing you’re building for 10 years” is not the same thing as spending money. If a business doesn’t start there instead you don’t get any money at all. So in both scenarios you get no tax revenue but without the business you hurt your own economy.
It’s not taxpayer money being sent away. It’s tax collection policy and if we claim tax exemptions are spending money, then the government is also spending billions on non-profits and low income households.
This is not the first time this type of thing happened almost looks like a laundering scam. Companies that do this should face real and very expensive consequences. But we know that will never happen.
Short answer: no.
The government just gave money to every executive in the company, and your argument is that because the company stock is also held by pension funds, they were supporting pension funds? Makes little sense.
Just giving the money straight to the pension funds would be much more efficient. This method enriches a bunch of non-contributors along the way.
The important takeaway is not only did the consumer pay more, but corporate profits rose.
https://bfi.uchicago.edu/wp-content/uploads/BFI_WP_201961-1....
No thanks