4 ms·

Don't Be Fooled by the Bipartisan, 'Paid for' Infrastructure Bill

10 points by cinquemb 5y ago

starkd 5y ago
Both CBO and UPenn Wharton School of Business called it a bust. https://www.washingtonexaminer.com/opinion/wharton-budget-model-predicts-bipartisan-infrastructure-bust https://www.washingtonexaminer.com/opinion/wharton-budget-mo...
throwaway34241 5y ago
I think people know that the pay-fors are mostly smoke and mirrors, they are only there to make the political (not economic) math work. The real question is if this bill makes sense as a deficit-spending bill. On a macro level, it's not so obvious that debt is bad and saving is good. On an economy level debt and saving are actually the same thing - two sides of the same coin. If you don't print money they have to balance out equally. If the government is going into dollar debt, that means everyone else is net saving, and vice versa. The usual concern is that government debt will "crowd out" private investment debt, leading to reduced private investment. The mechanism for this crowding out is higher interest rates. The argument for increased government spending is that the private sector isn't seeing a lot of opportunities for private investment at the moment (as evidenced by the low interest rates - if there were lots of low-hanging investment opportunities usually companies would jump at the chance to borrow so cheaply). And if no-one is borrowing and investing that's a problem for economic growth (and remember debt/savings are tied together, if debt doesn't increase savings can't either).
whoaisme 5y ago
I think anyone who compares government spending to an individual's financial decision to make some point about responsible spending is a total hack and probably has nothing insightful to say. Even I know enough to know such a comparison is totally worthless to make. It boggles my mind that people are paid to write this garbage and people spend the time seriously entertaining the nonsense these people put in your head.

10 points by cinquemb 5y ago

Both CBO and UPenn Wharton School of Business called it a bust. https://www.washingtonexaminer.com/opinion/wharton-budget-model-predicts-bipartisan-infrastructure-bust https://www.washingtonexaminer.com/opinion/wharton-budget-mo...

throwaway34241 5y ago

I think people know that the pay-fors are mostly smoke and mirrors, they are only there to make the political (not economic) math work. The real question is if this bill makes sense as a deficit-spending bill. On a macro level, it's not so obvious that debt is bad and saving is good. On an economy level debt and saving are actually the same thing - two sides of the same coin. If you don't print money they have to balance out equally. If the government is going into dollar debt, that means everyone else is net saving, and vice versa. The usual concern is that government debt will "crowd out" private investment debt, leading to reduced private investment. The mechanism for this crowding out is higher interest rates. The argument for increased government spending is that the private sector isn't seeing a lot of opportunities for private investment at the moment (as evidenced by the low interest rates - if there were lots of low-hanging investment opportunities usually companies would jump at the chance to borrow so cheaply). And if no-one is borrowing and investing that's a problem for economic growth (and remember debt/savings are tied together, if debt doesn't increase savings can't either).

whoaisme 5y ago

I think anyone who compares government spending to an individual's financial decision to make some point about responsible spending is a total hack and probably has nothing insightful to say. Even I know enough to know such a comparison is totally worthless to make. It boggles my mind that people are paid to write this garbage and people spend the time seriously entertaining the nonsense these people put in your head.