Quote:
Originally Posted by Tyrone Slothrop
Everything you say would make sense in normal times. These are not normal times. Have you noticed how cheap Treasuries are? The federal government can borrow right now at essentially no cost. (This is because things are so unattractive for investors that they are willing to park assets with the federal government even for no return.) In these circumstances, anything the federal government does with the money that has some economic return -- building roads, railroads, airports; teaching students, etc. -- will pay for itself. This is not propping up the status quo.
What assets do you think need to fall? Why aren't they falling? Why is having everyone -- public and private -- deleverage going to help? How do we make up the huge social loss caused by people who are not working?
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1. Bullshit. The govt cannot spur sustained economic activity. Markets, investors, businesses - they all see right through it. Sure, there's a limited bump from govt infrastructure building, but no one but a fool assumes it will continue once the project is completed. Transient activity surrounds a project for a while, then it is completed, then that activity disappears. The notion building a highway magically creates tons of new, long term activity on the basis, "Build a paved road and they will come," is lunacy. It's the kind of idiot-think only a govt-planner or policy wonk, who never worked in an actual business, would advocate.
I'll say it again: Govt spending can only provide a bridge loan to the next economic uptick. It cannot create sustained economic growth. Why you can't understand the difference between a patch and cure I can't understand. (You probably think the New Deal brought us out of the Depression, as well.)
2. Homes need to drop 10-20% to bring more first time buyers into the market in non-FHA products. The Dow needs to drop 2000 points, to bring individual investors back into the game, rather than allowing the hedge fund high-speed trading quant gambling circus we currently have to persist. We need an acute drop that ends the discussion, "Is this the bottom?" with a resounding, "Yes." Which would then be followed with, "So get in now. Invest while it's cheap. Buy because you'll never see a better deal."
