“You are right when you say that "It's true that money has to be spent over a long period in order to get more money in the end, but that this does not constitute any reason why the government should do it."
“… [N]ot every long-term investment of money is necessarily and automatically profitable or self-liquidating; that depends on the investor's economic judgment; bad judgment leads to a total loss, to bankruptcy or to "money poured down the drain." When, however, the investor is the government, then the results are necessarily disastrous for the economy, for the following reasons:
“A. There is no way, standard or criterion by which to judge the economic value and future of an investment, outside of the free-market mechanism of supply and demand (see Ludwig von Mises for the details of why economic calculation is impossible to a socialistic government).
“B. Assume in some specific case that the government has invested money in some long-term project which may actually have future economic value; the fact that it was a forced, premature investment which was not yet economically justified (that is: not yet profitable for private investors), which the economy could not yet afford, has disastrous repercussions on the whole economy and causes unpredictable, incalculably harmful consequences. The best example of that is the government-subsidised construction of the so-called first transcontinental railroad in the United States (the Union Pacific and the Central Pacific). A railroad, as such, is an economic value; but the premature construction of a railroad which private capital could not yet find profitable caused economic evils (the plight of the farmers, the Granger movement, etc.) which are still multiplying to this day.
“To illustrate my point in a simple manner: suppose that you are an industrialist and that you want to market an invention which will bring you a fortune in ten years; if your calculations are sound, that would be a good investment, and you would be justified in saving your money for it and in living modestly for ten years. But suppose you decide to market an invention which will bring you a fortune in a hundred years and for which the savings of your lifetime are not sufficient. Would that be a good investment? Would you become prosperous by spending your life on the level of semi-starvation and by draining the resources of all those who may lend you money? Would that be wise or economically sound? By what standard could you be certain—even if your entire generation died in misery, pouring all resources into your project—that the invention would still be needed or valuable to your children or grandchildren who, by that time, would be perishing for lack of shoes, clothes and adequate shelter?
“These are merely the economic or "practical" consequences of government "investment." The moral meaning and consequences are obvious: by what right does the government take the money of some individuals for the future benefit of other individuals? By what right does it [force] privations on an individual, against his own choice and judgment, for the future benefit of himself or others, actual or hypothetical? That which is in fact beneficial to an economy (that is: to the individuals who comprise an economy) is done by men voluntarily (as the history of capitalism demonstrates); that which cannot be proved to be beneficial does not become so at the point of a gun.”
- --Ayn Rand, from a letter to John Hospers, November 27, 1960, published in The Letters of Ayn Rand