Face it. It is over. Trump won.

[MikeRox]

LadyJasmine said:

Mnementh said:

Well, reality check: money IS made out of thin air.

https://en.wikipedia.org/wiki/Fiat_money

Basically the banks create money if you get a credit and the money is destroyed if you pay the credit back. The whole systems starts off by the central bank giving banks credits.

So using fiat money to finance infrastructure instead of financing grwoing debts seems not completely irrational to me.

It is irrational.

 

If government have been so corrupt and ineffective in managing money that was borrowed with interest.

 

How well will government spending money when they can borrow money endlessly.

 

Usually when governments spend a lot of money they spend more money he he.

 

Why doesn't the government just print money ? If governments need 100 billion can they just make it out of thin air to buy votes?

Currency only holds value as long as there is confidence in it. Printing money devalues that particular currency. Just see the most recent bout of quantitative easing in the UK for that. The pound slumped in the wake of the Brexit vote. Then the BoE confirmed for QE and it slumped even more.

So as nice as it would be to just have a blank cheque to print money to do all the infrastructure building, basically you would ultimately create hyperinflation.

Interest free lending on the otherhand... that would actually be pretty nice. Bond yields have been hitting negative territory, so actually, interest free would be a better rate than many of the better bonds on the market.

However you are right to point out, how well will that spending be used. The NHS is a great example of this at the moment, infact, Tim Fallon just today sung Tony Blair's praises over his "investment" in the NHS. However much of this was through PFI schemes.  So actually, Tony wasn't spending a penny on this investment. (as much as internet memes love to show how fiscally responsible New Labour was) It was being lumbered onto the NHS itself in the form of rent and servicing charges which trusts are being commited to for decades. The total amount of money repaid under these schemes, is many multiples more than the original new builds costed.

New Labour may well have condemned the NHS to privatisation with their reckless "investment". They knew they would be out of government before the chickens came home to roost, and are then able to just sit on the other side of the bench and moan about spending cuts. (yes this is simplistic, but the main point is, Labour spent a LOT more than they officially did on paper, because it was all tied up in future liabilities reliant on a perpetually growing economy and tax revenue. Thank god Gordon got rid of Boom and Bust...