On my way to work, in between phone calls, I caught a short piece of an NPR segment discussing the health care debate in light of tonight’s State of the Union address.  A commentator was explaining how the role of government was to redistribute wealth, and the government doesn’t generate wealth.

I’ve heard this argument before, and barely noticed until another commentator (providing a counterpoint) explained that he saw the government’s projects as being largely about investment, not simply wealth redistribution.

As an example, he used a highway construction project: building the highway was a capital expenditure that required tax dollars to complete (the wealth redistribution part, as those tax dollars went into the pockets of contractors and road crews), but was also an investment.  By building the highway, interstate commerce could improve, leading to a stronger economy, lower unemployment, higher GDP, etc.

The government is in the business of investments … in the country itself, rather than in a strictly monetary sense.  For instance, a traditional investment in a bond might yield a certain return thats (somewhat) predictable and in the same format of the initial investment (cash).  But a government investment often converts cash into another form of wealth: a stronger economy, etc.

It’s an interesting concept and one that requires a change in thinking of a government’s role.  Wealth redistribution seems like a fairly myopic view of a very complex institution.