Isn’t this lovely

And around the world commentators agree on three things. First, that we need massive new infrastructure investment. Second that we need to get people to work. And third that we need inflation, which can only come from an increase in demand which can only come from rising incomes resulting from getting people to work.

But although it is also, almost universally, agreed that the best agency to undertake such public works is, unsurprisingly, governments, who can fund it at present at almost no net cost at all, those governments sit back and refuse to do anything because they believe that markets must provide the solutions to all problems.

And this despite the fact that it is painfully obvious that markets are queuing up to say to governments that they want them to deliver the solution: that is what following the money tells anyone with the willingness to see. Despite negative rates they are still buying government debt.

We are stuck in a dogmatic pit of neoliberalism’s making from which it cannot apparently emerge. And all because politicians have sold the myth that debt is a bad thing when public debt is, in fact, the bedrock of private wealth. At some point this will be understood. I hope it will not be too late.

The bedrock of private wealth is buying government bonds so that government can then create the inflation which reduces the value of that private wealth.

Amazin’ innit?

12 thoughts on “Isn’t this lovely”

  1. > around the world commentators agree on three things. First, that we need massive new infrastructure investment.

    Must be a different usage of “agree” to the one I’m used to.

  2. “And around the world commentators agree on three things. First, that we need massive new infrastructure investment. ”

    Nope. Other than nuclear power stations, and a couple of odd motorways, there’s almost no new infrastructure that we need. We might need more labour – more nurses and doctors, maybe, but no, we don’t need new infrastructure. This is one of those conservative things of socialists. We did all the infrastructure like roads, sewage, phones and power decades ago. A lot of stuff doesn’t even need “infrastructure”. I’ve been to clinics in community centres. Couple of nurses turn up with an ultrasound and go into a room and do the work.

  3. Bloke (back) in North Dorset

    These constant calls for “infrastructure spending” and “more manufacturing” are like a form of Tourette’s Syndrome. They never tell use what will be built and where and how it be of benefit or what we are going to manufacture and who is going to buy it.

    We might as well be digging holes with spoons.

  4. Bloke (back) in North Dorset

    Your argument is absurd

    The state cxreates wealth, as Marina Mazzacuto has illustrated

    Candidly your argument is neoliberal pendantry

    Yoiur time here is at an end

  5. FFS. Murphy can in the same paragraph announce that it almost universally agreed that Governments are best place to invest in the economy and then say Governments aren’t doing it because they don’t believe they are.

    This would be Governments of all political persuasions surrounded by tens of thousands of advisers.

    Not exactly universal agreement then……..

  6. that is what following the money tells anyone with the willingness to see.

    You’re all just ‘unwilling’ to see the solution.
    What a cock.

  7. For as long as government has existed in any recognisable form its primary source of income has been taxation. Therefore private wealth must exist first in order for there to be anything to tax (or indeed, anything to confiscate). Since government cannot exist without a source of funds this means that the existence of private wealth is a precondition for the existence of government. The taxation of private wealth also provides governments with the means to pay their debts, so lenders will only be willing to lend to a government as long as it has further resources of private wealth to draw on. Therefore private wealth is the bedrock of public debt.

  8. “First, that we need massive new infrastructure investment.”

    We hear this all the time from the Left, and the Left demonstrate, occupy and prevent any infrastructure being built. It’s bizarre.

  9. Rob,

    Well, it’s not for doing anything.

    It’s like all the lefties that hate that Thatcher kicked the miners out of jobs, but don’t want any coal being burnt.

  10. Haven’t the Japanese been borrowing money and spending it on infrastructure for 20 years now with very little to show for it in growth terms?

  11. Infrastructure is important, locally we have several badly needed projects underway.

    All water bills now contain a $15 charge for upgrading the water and sewage system. It is a regressive tax but the work is desperately needed. Water main breaks are a constant problem in the winter.

    A 39¢/gallon tax on diesel fuel for river traffic is being used to fund improvements in our lock and dam system. Multi-hour delays are common on all locks.

    I could go on but the importance of infrastructure is not the key issue. Mechanization has eliminated the need for the army of guys with shovels. A project that used 1000 workers a century ago will now use 100 or less. A different method is needed for transferring wealth to the unemployed due to the increased cost per job for labor.

  12. How can so many commentators be so wrong all the time? The last time Simon Wren – Lewis blogged on this alleged need for infrastructure spending I asked him who was going to do the work and if he had visited London in the last year. If he had managed to get his lefty body outside his cosseted Oxford college, he might have noticed what seems to me to be an insane amount of construction activity going on. There is more happening than in the reconstruction after the fire of 1666. Crossrail is happening. Massive blocks of 60s developments are being redeveloped. You cannot walk 100 yards without passing a construction site. Which rational person thinks we need more construction? Who is going to do the work?

Leave a Reply

Your email address will not be published. Required fields are marked *