Quote from: RoadTrain on September 20, 2014, 06:31:10 PM

Quote from: panju1 on September 20, 2014, 06:06:28 PM

Quote from: RoadTrain on September 20, 2014, 11:39:00 AM

Wrong, government borrowing doesn't crowd out private investment per se. Government borrowing is a vertical transaction, while private investment is horizontal.

There's an article explaining this fallacy in simple words.
http://econrevival.blogspot.ru/2013/10/crowding-out-and-its-relation-to.html

The blog does have some disclaimers.

Having said all this, is it possible that in some cases government spending influences business incentives to a degree that might cause less private investment.

Of course it is. Probably. And I noted it by using adverb per se.

It's a government's responsibility to spend wisely, to try to achieve maximum efficiency in resource utilization. But that's not what most governments do.

The government does not spend wisely, and is very inefficient in utilizing resources. Money lent to the government will be used less efficiently then money lent to the private sector.

If you say "per se" then your statement is effectively false.