US government takes $2 billion equity stake in nine quantum computing firms

Beneficiaries include start-up backed by firm with links to the Trump family.

See full article...

 

[Tactical Finesse]

I'm looking for a 10 letter word that starts with "Co" and ends with "rruption". Anyone lend a hand?

 

[Tactical Finesse]

Every other day someone gets a $1B+ payout without any congressional oversight. It's impossible to tell if any of them are legitimate investments. The interest on our debt is becoming the predominant usage of our tax dollars.

It entirely depends on how you frame it:
https://budgetmodel.wharton.upenn.e...pending-is-distributed-by-age-group-in-fy2025

vs.

https://www.pgpf.org/programs-and-projects/fiscal-policy/monthly-interest-tracker-national-debt/

And then Trump is wanting to raise DoD spending by 30% or $500 billion USD to $1,5 trillion USD...or said another way--that is the equivalent of increasing every worker's federal income tax $3,000USD annually. That last bit is why fans of increasing military spending--never frame it that way. Because no one would ever agree to it when posed like that.

 

[Tactical Finesse]

I know this really wasn't your point, and not that I'm a fan of capitalism, but...

In a capitalist society, governments benefit from giving money to the private sector by taxing the resulting improved economy. There is no capacity for fairness when a government with a capitalist framework takes a stake in private companies. The whole point of a capitalist approach is that the government is a neutral player in any given industry. If a judge owns stock in a company, they're (theoretically) supposed to recuse themselves from cases involving that company. What, is the government going to recuse itself from regulating industries now?
Uggghh.

It is a damned if you do or don't scenario.

I, personally, find it disgusting handing out taxpayer money to for-profit private entities when we don't even have a healthcare system in the USA. Except--other countries ARE handing out that money to both public companies (see TSMC), and private ones (Samsung), oh and all the industry subsidies China does. And when the USA doesn't do it--those industries just vanish in the USA.

Think of it like a Europa Universalis game IRL. Feel free to be ideologically pure in how you play it--but you'll get absolutely crushed by any- and everyone else who is more "flexible".

 

[Tactical Finesse]

Government ownership and control of the economy. Both Marx and Mussolini would approve.

Mussolini, yes. Marx not so much.

 

[Tactical Finesse]

No? Workers own the means of production? Dictatorship of the proletariat? Oh, eventually the state is supposed to wither away, but in the meantime...

You really misunderstand what is going on.

Government owning equity in a business isn't workers owning the means of productions or the "dictatorship of the proletariat". It actually has much more in common with Soviet style Statism, where politically-connected business owners are awarded loyalty kickbacks in the form of exclusive contracts and the people who benefit...aren't the workers of those companies, so much as the (loyal) managers of those companies.

And, of course, less dictatorially-loyal businesses, have the force of the government put against them.

 

[Tactical Finesse]

Giving money to specific companies isn't the issue; subsidies and grants are important tools for all governments. Taking a stake in the company in return is the problem. They're setting things up so that the government benefits not from the success of the industry, but from the success of the company -- regardless of the success of the overall industry. From now on, all investors are going to believe its much less likely for those specific companies to really struggle, and much more likely for those companies to get lucrative government contracts and tax breaks. This gives them a huge advantage and stifles competition, promoting monopolies. This magnifies the problem, since the likelihood of the government breaking apart a monopoly it directly profits from is rather slim.

Also, it's essentially taxing the same company twice (directly through the owned shares and indirectly through taxes), meaning the companies are paying the government for the privileges noted above.

Again, this is a problem because of the capitalist framework. If we allow ourselves to flex into other approaches where appropriate, that allows for added oversight of both the company and the government's role and action directed toward national interests which ameliorate the downsides substantially. But we aren't doing that. We're taking a financial stake and then trying to pretend that nothing has changed. It's bonkers, it gooses markets in the short term, and it adds considerable liability and instability to our economic system in the longer term.

That is all quite fair. Well put.

I was talking to people about the absurd CEO compensation that is effectively untaxable, as it is almost entirely in company stock with unrealized spot-price value that they they borrow against to live off of. One idea was basically the government "taxes" the stock and gets some ratio, say say 50% of the shares...Which in short order, given how management of publicly listed companies always works, would result in government holding a very diversified set of assets.

Caveat being that doesn't address the insane management compensation--it just puts the government in bed with it. It also doesn't address the extreme short-term myopia of corporate board rooms.

 

[Tactical Finesse]

Of every bit of encrypted web and email traffic that’s been sent in the past 20 years that they’ve been snooping and hoarding off all the backbones.

You ignore the biggest use case...theft.

The irony of this administration being all in on cryptocurrency, while at the same time funding quantum computing which will probably put cryptocurrency out of business, isn't lost on me.