[gumby]

It distorts investment away from the direction people would otherwise prefer to invest in.

[magicsmoke]

There's a global debate happening today about whether complete free market allocation of investment is best, or whether East Asian state-lead investments into technological advancements is. If the free market was all we need, then why should the government invest into scientific research?

[gumby]

That debate has gone on since the 17th century at least. Obviously neither extremum is effective.