> You now see American business people like Elon Musk promote divestment from the USA in his attack on government deficits.
Source?
If that's true, that's disgusting.
Source?
If that's true, that's disgusting.
Context: The bill they're talking about is unusually porcine, to the point of overwhelming even cynics. Relevant example: Subsidies of $12,500 for electric vehicles, but only if they're made by a union. Because auto unions are major campaign donors.
Everybody always talks about "oh the government spends so much money on pork all the time, deficits are so big etc." but this is another level:
https://fred.stlouisfed.org/series/FYONGDA188S
Federal spending as percent of GDP last year: More than triple the level present during the New Deal. >50% increase year over year.
It's unprecedented in peacetime. The only time it has ever been more as a percent of GDP is WWII, and in dollars (even per capita and adjusted for inflation) it's already more than WWII.
This year's proposals are a significant increase from that level.
The claim that to oppose the bill is to "promote divestment from the USA" is pretty bold.
There are of course criticism in the details. For example, a majority of the funds went to the top 10% which isn't great. How the funds were deployed was far, far from ideal. It lead to asset price inflation because of this. So there are problems with it, but the alternative, not investing, would have been much worse.
The criticism of the details is the point. Spending half as much money by cutting out the portion that went to the top 10% is only the most obvious of the better alternatives.
This doesn't mean anything without the details:
> Government deficits are an investment.
The government can borrow a trillion dollars and give it to Mark Zuckerberg or whoever else donates the most to their campaigns. That's not an investment, it's corruption. It represents a net loss to the American people, because they lose the money, have to pay interest on the debt forever, and get nothing in return.
To be an investment you actually have to invest in something. But during an economic crisis, the best thing to invest in is people. If you're going to borrow money, just send out the checks. Everybody gets the same amount. It helps the people who are in trouble, it stimulates demand, and it isn't susceptible to corruption or regulatory capture.
And if you did that, you wouldn't have to borrow as much, because the same money would be more effective and the same benefit could be achieved with less of it.
But that's not what's happening.