News Breaks: Apples are in fact not Oranges

The BBC runs an article noting that the US Treasury, as of July 27, 2011, possesses less cash than Apple. The Treasury’s financial statement ended that date is available on their website, with an ending cash total of $73,768M.

The federal government and Apple computer do not make for a very interesting comparison. Apple is a publicly traded corporation whose management seeks to maximize profit, while the United States is a democratic republic.

Apple engages in profitable business lines, eliminating them if they prove not to be. Our national highway system is not itself profitable. It requires a massive, ongoing capital investment, yet served as an important factor in post-World War II growth in the United States. The (forced) taxable contributions that fueled and continue to support this network are important may be abhorrent to some, but their collection by a state overcomes the significant barriers to entry a national highway system entails for the private sector. A private highway system would incur addition transaction costs, such as a potentially inconvenient array of  toll collections for one, than a federally-funded system. Indeed, all roads may lead to Wal-Mart under a private system; a state-run and taxpayer financed system balances coercive revenue collection with correcting an (arguable) area of market failure.

In short, the federal government’s purpose is not profit maximization. Though there are many systemic problems with our system which make for fodder for this website, the Treasury’s comparison to a corporation is not very interesting.

This entry was posted in Accounting Standards, Federal Debt, Government Failure. Bookmark the permalink.

One Response to News Breaks: Apples are in fact not Oranges

  1. rerieger says:

    I am a relative novice on the subjects of economics and political science, but I wanted to comment on this particular post in order to examine Apple’s success and possibly explore its social and psychological underpinnings. I understand from this post that the government and Apple computers do not function in a the same way economically – one is obviously out to make a substantial profit where the other simply because of its nature cannot. However, Apple’s success says something about American society and how easily we are seduced by sleek design and stylish marketing. A computer is just a computer and most are used on a very basic level by those who own them. What makes Apple so much better?

    When posing this question to Apple owners (many who are close family and friends of mine) I get these responses – Macs are easy to use – “user-friendly”. They are great for graphic design or artistic pursuits. Garage Band is a huge hit and others like how their iTunes library runs. Others say that Apples last much longer than PCs in order to justify the amount of money spend on them. What do you have to say about Apple, author, as a relative computer expert compared to the individuals I’ve spoken to? I’m interested to find out because I believe that Macs are being bought for new college students by the dozens in order to “fit in” and appear artistic and “hip”, not because Apples possess better operating systems than PCs. Has America be fooled by Apple’s clever marketing or is it really true? Will I instantly become an interesting, intellectual and creative person as well as a smart consumer if I buy a Mac?

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