tag:blogger.com,1999:blog-11027528911364475.post3186251903158191160..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: "We're All Socialist Now" Construction EditionJakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-11027528911364475.post-20867927752238003882009-09-01T14:39:58.747-07:002009-09-01T14:39:58.747-07:00There are a lot of shibboleths running around. Thi...There are a lot of shibboleths running around. This is good on two fronts. First, stimulus is stimulus in the short-term; doesn't matter if you throw bills in cleavages at Vegas if the gal goes and feeds her kids. In the long-run if it builds bridges, repairs road, prevents another brownout it's investment that raises l.t. output. We're so far from worrying about a revival of private demand and/or crowding out that the real question is whether we can get this engine primed enough to be self-starting or it stalls in a few quarts. Which did this last time in '04. Remember those two Kariel papers I pointed out ?dblwyonoreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-90489157272066974762009-09-01T14:07:35.635-07:002009-09-01T14:07:35.635-07:00Government also happens to be the biggest buyer of...Government also happens to be the biggest buyer of mortgages through Fannie and Freddie. The private market for mortgage backed securities is for all practical purposes, frozen. Foreigners use to be big buyers of agency securities (Fannie and Freddie) and now they are backing away as well. See chart here:http://akhilaaiyer.files.wordpress.com/2009/09/tic-graphs-4.pdf. Guess the next round of funding comes from the printing press.AkhilaAhttps://www.blogger.com/profile/12495591712289434102noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-86207316610381583092009-09-01T10:57:19.073-07:002009-09-01T10:57:19.073-07:00I think the question to ask is what is being built...I think the question to ask is what is being built. Broadly speaking, I can't think of what the government could build that wouldn't result in further over capacity; however, I am unsure of what they are building.<br /><br />Furthermore, they have financed other construction through TALF and god know what other programs resulting in more capacity and debt.<br /><br />On the margin, I have to think this is a negative given what I believe are secular issues facing the economy. In short, I don't that government construction will bridge the gap, only delay it.Zachary Abramshttps://www.blogger.com/profile/04436845339456920198noreply@blogger.com