Obama calls on Congress to approve $21B infrastructure bill

[fmw]

Wacky to take on debt to make long term investments? How silly of me. Here I thought that was the only reason why you should ever take on debt. Gotta have a word with my parents for deluding me with such crazy responsible ideas.

You are getting confused about the term investment. The purpose of an investment to provide for future earning. Investment is involved in wealth creation. The government is a net spender of wealth. It doesn't invest. It spends. While it would make sense for a business to invest in plant and equipment (infrastructure) in order lay the framework for future profits, that doesn't apply to government.

Tell me, what exactly are the short term consequences of taking on more debt? Is a marginally higher debt worse for America than a relatively more sluggish economy? Are people going to stop buying debt? Will China come and evict the politicians from Washington? Seems to me like we can still borrow with limited consequences, which is only a problem if our return on investment is less than the total amount we'd have to pay back. (which isn't the case with infrastructure spending)

Government debt doesn't do anything positive for a sluggish economy. It can only make it more sluggish. So the anwer to your first question is yes. China, for one, has stopped buying our debt. That's why the Treasury is currently laundering printed money through the Fed. Again, there is no return on investment because government spending is not an investment.

Its nice that we spend on infrastructure, but the guys with engineering degrees say it's not nearly enough: 2013 ReportCard on America's Infrastructure. One purpose of this spending is to prop up the economy's sluggish demand, which would be defeated by increasing regressive taxation. In any case, this type of spending should have a much higher priority than we give it; if you're going to be adamant about paying for it immediately there is no shortage of inefficacious government programs with less benefit to the economy we could discuss.

I'm not against spending on infrastructure. I'm only against government borrowing. If the government has the money to fix some roads and wants to do so, that's just fine with me. But they don't the have money even to do what they do now.

 

[ChunkySalsa]

You are getting confused about the term investment. The purpose of an investment to provide for future earning. Investment is involved in wealth creation. The government is a net spender of wealth. It doesn't invest. It spends. While it would make sense for a business to invest in plant and equipment (infrastructure) in order lay the framework for future profits, that doesn't apply to government.

Government debt doesn't do anything positive for a sluggish economy. It can only make it more sluggish. So the anwer to your first question is yes. China, for one, has stopped buying our debt. That's why the Treasury is currently laundering printed money through the Fed. Again, there is no return on investment because government spending is not an investment.

I'm not against spending on infrastructure. I'm only against government borrowing. If the government has the money to fix some roads and wants to do so, that's just fine with me. But they don't the have money even to do what they do now.

I disagree. The only reason why investment doesn't directly lead to future profits for the government is because the government is non-profit. All the benefits go to the American people (an unacceptably large sub-set of which is a bunch of bastards who bribe politicians to divert things from the common good into their own pockets.) If "investment" as economic jargon is technically incorrect, assume I meant it in the broader colloquial sense.

Government debt doesn't help the economy...but the spending done to incur it sure does. Again, there is a return on investment: an improved economy more able to bear increased taxes to pay off the debt.


Well, at least we don't disagree with the experts saying that the infrastructure needs work.

 

[washunut]

Wacky to take on debt to make long term investments? How silly of me. Here I thought that was the only reason why you should ever take on debt. Gotta have a word with my parents for deluding me with such crazy responsible ideas.

Tell me, what exactly are the short term consequences of taking on more debt? Is a marginally higher debt worse for America than a relatively more sluggish economy? Are people going to stop buying debt? Will China come and evict the politicians from Washington? Seems to me like we can still borrow with limited consequences, which is only a problem if our return on investment is less than the total amount we'd have to pay back. (which isn't the case with infrastructure spending)

Its nice that we spend on infrastructure, but the guys with engineering degrees say it's not nearly enough: 2013 ReportCard on America's Infrastructure. One purpose of this spending is to prop up the economy's sluggish demand, which would be defeated by increasing regressive taxation. In any case, this type of spending should have a much higher priority than we give it; if you're going to be adamant about paying for it immediately there is no shortage of inefficacious government programs with less benefit to the economy we could discuss.

Yeah, lots of money is soaked up by cracks and potholes, but at least it puts people to work doing something productive that needs to be done anyway. When the doctor notes your bad health is from a lack of exercise, you could do much worse than catching up on years of backlogged housework.

The states are more constrained than the federal government. If they can't or won't do this work, the federal government should definitely take up the slack to prop up interstate commerce.

Take a bit more time to read the comment. I said it is wacky to take a short term view on the debt being piled up, and what do you do explain why the debt SHORT TERM doesn't matter.

Then you lack any response to the rest of the points.

Pretty sad.

 

[washunut]

I disagree. The only reason why investment doesn't directly lead to future profits for the government is because the government is non-profit. All the benefits go to the American people (an unacceptably large sub-set of which is a bunch of bastards who bribe politicians to divert things from the common good into their own pockets.) If "investment" as economic jargon is technically incorrect, assume I meant it in the broader colloquial sense.

Government debt doesn't help the economy...but the spending done to incur it sure does. Again, there is a return on investment: an improved economy more able to bear increased taxes to pay off the debt.


Well, at least we don't disagree with the experts saying that the infrastructure needs work.

No one disagrees with that. The question is will we really take on those needs to just do the equivalent of digging holes then filling them up.

 

[fmw]

I disagree. The only reason why investment doesn't directly lead to future profits for the government is because the government is non-profit.[

Government debt doesn't help the economy...but the spending done to incur it sure does. Again, there is a return on investment: an improved economy more able to bear increased taxes to pay off the debt.

It is more fundamental than that. Government, by definition doesn't create wealth. It spends wealth. No amount of government spending can help the economy because the money comes from that very economy. In places like Saudi Arabia, where they can dig money out of the ground, that sort of thinking works for as long as the oil holds out but it doesn't work in a mature first tier economy like ours. What they want you to believe is that by borrowing money to get through a tough period, somehow we will get ahead but you already know that debt doesn't help. The government doesn't have tough periods. We do.

So the businessman solutions are pretty clear. The way to have more wealth in the economy requires two things. The first is that we have to have something to trade so that we can bring money from other places rather than sending ours to other places. The second is that government has to take lesss of it so that we - from large corporations to individuals like you and me - are left with more of it. We've been sending our manufacturing abroad for a long time so that you and I can have the things we want for a lower price. As consumers, we have voted with our dollars and motivated manufacturers to outsource. We need to vote with our dollars to bring manufacturing (and agriculture) back home. We have also allowed the government to get richer as we have gotten poorer. Those are basic fundamental truths. I don't see any way around them. Anything else is political and power based.

 

[ChunkySalsa]

Take a bit more time to read the comment. I said it is wacky to take a short term view on the debt being piled up, and what do you do explain why the debt SHORT TERM doesn't matter.

Then you lack any response to the rest of the points.

Pretty sad.

I'm saying jobs and employment should be our highest priority, with balancing the budget being a lesser concern. Infrastructure work is not useless digging and filling in holes, its more like getting preventative maintenance on your car after the dashboard lights come on and it starts making weird noises. I disagree that budget shortfalls will make the Moon fall out of orbit and kill us all, but I'll leave that debate to those with economics and/or physics degrees.

And I'm sorry for making you sad by ignoring your points. :mrgreen: Here's a picture of a bunny to cheer you up.

 

[jonny5]

I'm saying jobs and employment should be our highest priority, with balancing the budget being a lesser concern. Infrastructure work is not useless digging and filling in holes, its more like getting preventative maintenance on your car after the dashboard lights come on and it starts making weird noises. I disagree that budget shortfalls will make the Moon fall out of orbit and kill us all, but I'll leave that debate to those with economics and/or physics degrees.

Unstable govt finances makes economies nervous, which means wild market swings, bubbles, and hoarding of resources. Which means the economy doesnt grow. So stablizing the govt finances would means certainty for investors and thus jobs and employment. Infrastructure wont create employment because theres no demand for it, and govt doesnt know what infrastructure is best. WHat would be better would be returning to conditions which allow the market to decide the way forward, with local govts supporting them as neccesary with infrastructure projects. The federal govt is simply incompetent at domestic spending.

 

[Deuce]

You are getting confused about the term investment. The purpose of an investment to provide for future earning. Investment is involved in wealth creation. The government is a net spender of wealth. It doesn't invest. It spends. While it would make sense for a business to invest in plant and equipment (infrastructure) in order lay the framework for future profits, that doesn't apply to government.



Government debt doesn't do anything positive for a sluggish economy. It can only make it more sluggish. So the anwer to your first question is yes. China, for one, has stopped buying our debt. That's why the Treasury is currently laundering printed money through the Fed. Again, there is no return on investment because government spending is not an investment.



I'm not against spending on infrastructure. I'm only against government borrowing. If the government has the money to fix some roads and wants to do so, that's just fine with me. But they don't the have money even to do what they do now.

So, what, let roads decay to the point of being unusable? How will the economy do without our trucking industry?

 

[Fenton]

Compared to the
$3T we spent on Bush's vanity wars building nonoperable firestations in Iraq, I think Obama's proposal is modest. I'd double it.

Funny how market evangelists no longer believe in investment in productivity. It's like you have to walk them through how capitalism works over and over again.

3 trillion ? The Iraq and Afghanistan wars that were given the green lights by Dems cost 1.4 Trillion.

Not counting what Obama added to them of course.

 

[jonny5]

So, what, let roads decay to the point of being unusable? How will the economy do without our trucking industry?

Private companies will build toll roads or trains. Local govts will maintain roads instead of sending their money to DC to waste.

 

[clownboy]

Filled with projects to nowhere and years late. Someone should have taught this POTUS order of operations. He needed to lead with infrastructure repair and rebuild in 2009, as he promised in his campaign.

 

[washunut]

So, what, let roads decay to the point of being unusable? How will the economy do without our trucking industry?

The government will spend between 3-4 trillion this year. If infrastructure is that important find somewhere else to cut.

 

[head of joaquin]

Unstable govt finances makes economies nervous, which means wild market swings, bubbles, and hoarding of resources. Which means the economy doesnt grow. So stablizing the govt finances would means certainty for investors and thus jobs and employment. Infrastructure wont create employment because theres no demand for it, and govt doesnt know what infrastructure is best. WHat would be better would be returning to conditions which allow the market to decide the way forward, with local govts supporting them as neccesary with infrastructure projects. The federal govt is simply incompetent at domestic spending.

The uncertainty meme was floated as soon as Obama won the presidency. It's total nonsense without a scrap of empirical evidence. Krugman pointed this out a long time ago as he walloped some rightwing talking heads.

 

[Fenton]

The uncertainty meme was floated as soon as Obama
won the presidency. It's total nonsense without a scrap of empirical evidence. Krugman pointed this out a long time ago as he walloped some rightwing talking heads.

BWHAHAHAHA......Krugman.

Creepy Cat lady trapped in a frumpy mans body Paul Krugman.

Here's what your President is ACTUALLY doing. Creating massive new structural debt with no pay off in the future. Get it ? Bad debt. He's got his FED appointee paying banks interest on their massive reserves which helps hold down interest rates so Obama can continue getting "free money". Oh and the banks can get free money from their depositors.

Hes driving up up bond values by printing money and monetizing our short term debt by a margin of 70% .

He's driving up asset values and none of this is backed by any substantial contemporary means.

China and Australia have chosen a direct trade route to isolate the American dollar not to mention China's on a 5 year plan to quit buying Treasuries all together.

But you folks call this a "recovery". Its the best Obama can do, perpetual quantitative easing and a massive inflationary pressure is set to knock out any new ACTUAL recovery in the future.