When Walz says ‘government investment,’ he means ‘spending’
Investopedia (a financial website) defines investment as “the act of allocating resources, usually money, with the expectation of generating an income or profit.” Ordinarily, these funds being invested have to come from savings. Individuals defer current consumption and instead put their money into certain businesses in order to rip a profit later.
You might see how that definition does not come close to what Lt. Governor Peggy Flanagan considers investing.
Politicians usually use the word “investing” to obscure what they really mean, which is just more spending on government programs. In their supplemental budget, Gov. Tim Walz and Penny Flanagan talk about all the programs they will “invest” in; what they really mean is spend on.
The government has no savings to invest, nor is the government reducing current consumption to make these so-called investments. They are taking money from you and me — in the form of taxes — and they would like to use that money in programs that yield no gains, at least in the sense of economic or social benefit.
This is money that we ourselves could invest in the stock market, real estate market, or anywhere else and potentially turn into a profit.
This is not to say that all government spending is bad spending. However, Minnesota is already a high-spending, high-tax state. This means that more government spending will crowd out private investment in the economy. If the government keeps taking more and more of our money to spend on these programs, we will have less and less money to invest in the economy and make it grow.
Sure, sometimes investments come with losses, but that’s usually a bug, not a feature. When individuals are looking for investments, they are mainly looking to make a profit, and that is what drives their investment decisions.
If government spending was really an investment, it could pay for itself, but that’s not what happens. Each passing year, our legislators are asking for more and more of our money to “invest” with little to no record that these earlier “investments” paid off.
It’s clear that when they say investment, all they mean is plain old spending.