Value Line Observer – Jan 8 2010
This week’s Rant is basically that if you put a large chunk of the productive capacity of the country under the direction of a non-profit organization, you will get lower returns on capital than you would have otherwise, leading to a lower growth in national wealth than you otherwise would have attained. The beauty of this argument is that it is virtually irrefutable.
If the economy grows even one-half of a percent slower, for 30 years, than it would have otherwise due to the divergence of national resources from their highest return use into a use that very well may lead to better social outcomes according to some, but will certainly deliver lower returns, then there is a real cost to be born by future generations in the form of lower wealth per capita. This is the next generation that will have 20% less wealth per capita than they otherwise would have, which means 20% less of everything — housing, transportation, education, recreation, medication. And if those future victims could understand what was happening, they would most certainly be against it — that is if there were anyway for them to find out what was happening.
