[jvreeland]

> If this is correct, tax policy is a huge distraction, and if governments really want to jump-start growth they should be funding basic research, ensuring that the results are public (to their citizens, at least), and encouraging bright young people from across the world to immigrate to their jurisdictions.

Which could be accomplished by raising taxes.

Raising taxes, particularly in the US to pay for social services like healthcare and education would also have a huge effect on growth and productivity. It's not really the level of taxes that matters it's that you spend money on things that enabled people to pursue innovation/employement/art/etc and not get burnt out on administrative bullshit and constant stress from preventable things.

[dv_dt]

It's funny that the model we ended up with is that social activities of government can only be funded by budget-constrained financing where deficits are viewed with alarmism, with taxes not really causing strong growth/shrink effects.

On the other hand commercial activities can be funded via issuing currency through fractional reserve banking - causing national and global asset bubbles with periodic recessions and terrible effects on growth and productivity.

I think we need to move to different mental models of both to advance past our current economically induced problems.

[chii]

> social activities of government can only be funded by budget-constrained financing

> commercial activities can be funded via issuing currency through fractional reserve banking

It's because the benefits of social activities cannot be captured and its value extracted. Commercial activity can - and therefore, there's motive for somebody to fund it to get richer.