Anti-Free Market, or getting the taxpayers to underwrite your risk


Sticking it to the taxpayers while promising the moon
This is one of the abuses that comes from capitalism.

The House approved a measure Wednesday to help finance a proposed spaceport in southern New Mexico, a project that one lawmaker called a "risk of unprecedented proportion'' for the state.
   
The bill allows for local governments to impose a local option gross receipts tax levy to provide money for development of the $225 million spaceport proposed by Gov. Bill Richardson.
   
Counties and municipalities would be authorized — with voter approval — to raise gross receipts taxes by amounts ranging from one-sixteenth of a cent to one-half of a cent.
   
The measure cleared the House on a 42-14 vote and goes to the Senate, which has approved an identical bill.
   
The Richardson administration sees the spaceport as the start of a new space industry in New Mexico.
   
British tycoon Richard Branson says his company, Virgin Galactic, would put its headquarters at the facility and launch tourists on suborbital flights from the site.

I rank it right up there with sports stadiums or with building a theme park near the Grand Canyon. There is a REASON why these private groups can't raise the capital without going hat in hand to local governments. Every single time a government decides it has a "sure thing" in one of these investment schemes, they risk not only tax money but the bond rating. It's the government equivalent of junk bonds, once in a great while it might pay off, but most people are going to have less than they started with.

Think about it this way. If there were a chance of decent return on investment, there would be no shortage of private investors to underwrite the risk. After all, that is precisely what happens with the stock market every day.

Hat tip to Enjoy Every Sandwich.

— NeoWayland

Posted: Fri - February 10, 2006 at 07:59 AM  Tag


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