They are saying the government should not give money to loss making private companies (that keep profit when things are going well).
If something cannot be done profitably but provides an important service to a society, it should be owned by the government on behalf of the people .
Water supply is the most obvious example. Trains is another . As many companies are finding - it’s not easy to do this profitably - without big subsidies - because the infrastructure development and maintenance is capital intensive.
Private companies driven by a profit motive, start to cut corners resulting in a degradation of service. If it’s a TV, people get more re-runs and grumble. If it’s a water company- people get sick. If it’s a train company - people can’t get around and the economy is hurt.
So the argument is, a lot of the stuff essential to society, should be protected from ‘the profit motive’. To ensure widespread availability and quality.
The citizenry is then taxed appropriately to fund it.
As oppose to giving free money to the same failed business?
It’s because you (as a government of a private entity) dont bail out companies who’s business can’t work. Classic private equity funds buying distressed equity (or assets convertible to equity) take over management & set strategy, and overhaul the company or just wait a few years providing operating capital, then resell at a profit.
USA government just gives free cash to giant companies that sometimes even operate at a profit already (but had like paid out to much dividends & aren’t liquid enough to sustain themselves for 2 bad months, lul). That’s just direct transfers of taxpayers money to individual not-as-much-taxpayers.
Why would everyone here want government to own failed business??
No one does - that’s not what’s being said here .
They are saying the government should not give money to loss making private companies (that keep profit when things are going well).
If something cannot be done profitably but provides an important service to a society, it should be owned by the government on behalf of the people .
Water supply is the most obvious example. Trains is another . As many companies are finding - it’s not easy to do this profitably - without big subsidies - because the infrastructure development and maintenance is capital intensive.
Private companies driven by a profit motive, start to cut corners resulting in a degradation of service. If it’s a TV, people get more re-runs and grumble. If it’s a water company- people get sick. If it’s a train company - people can’t get around and the economy is hurt.
So the argument is, a lot of the stuff essential to society, should be protected from ‘the profit motive’. To ensure widespread availability and quality.
The citizenry is then taxed appropriately to fund it.
As oppose to giving free money to the same failed business?
It’s because you (as a government of a private entity) dont bail out companies who’s business can’t work. Classic private equity funds buying distressed equity (or assets convertible to equity) take over management & set strategy, and overhaul the company or just wait a few years providing operating capital, then resell at a profit.
USA government just gives free cash to giant companies that sometimes even operate at a profit already (but had like paid out to much dividends & aren’t liquid enough to sustain themselves for 2 bad months, lul). That’s just direct transfers of taxpayers money to individual not-as-much-taxpayers.
For the same reason big companies buy out smaller and failing companies.