Assume public investments undertaken pay back at roughly a 4% discount rate.
And, for the sake of the argument, you can ignore the currently moderately high risk of deflation if you do nothing. Fai de bèn a Bertrand, te lou rendra en cagant
If debt is used to fund investment, then usually the accompanying increase in economic activity makes it possible for no inflation to appear. If debt is used to fund consumption, then you will have inflation (of the asset price kind if wages and prices are constrained by other factors like brnging in China's workers in the equation).
So it is less unreasonable to argue for a debt-fuelled investment package by government, as opposed to a pure stimulus (giving money to households for them to consume). But that's not really what we're talking about here, is it? It's certainly not what Brown and Sarkozy are pushing, and which redstar is defending so ardently. In the long run, we're all dead. John Maynard Keynes
Enough of this. This is bullshit. It's your blog. I'll go build me own. Fai de bèn a Bertrand, te lou rendra en cagant
I supported Steinbruck's specific point that debt was dangerous today and you said that my Germanic (now Hooverian) obsession with balanced budgets was misguided in view of the tsunami coming towards workers in Europe.
We've been talking past one another ever since. In the long run, we're all dead. John Maynard Keynes
On more than one occasion it's been made clear to me that my perspective is far out of the mainstream of accepted views here, this is another ongoing one.
I don't mean to be supercilious or anything about this, really I don't. It's just pretty clear this is not a particularly fruitful debate. On this and many other subjects we are talking past another. I'd rather go and be productive elsewhere. Fai de bèn a Bertrand, te lou rendra en cagant
