ozzy43

Which Inflation Is It Anyway?

Regarding this assertion:

"We expect continued heavy spending on infrastructure in many regions, and that they could be joined by the US itself post election. The US needs that spending anyway and infrastructure has been proven to be some of the most effective 'make work' money."

I am aware of no proof along these lines whatsoever. This is nothing but Keynesianism - an ideology which insists that economic stagnation and inflation can *never* exist side by side. And yet - we know it does. Thus, the underpinnings of this form of economics is fatally flawed.

Bastiat's 'Broken Window' parable is on target here. Money coercively extracted by the government and spent on 'make work' projects is money that is NOT being allocated by the market, thus represents a reduction in efficiency, and thus a reduction in net productivity, compared to a situation where government did *not* extract and spend that money. This is not a difficult concept, yet it is apparently not understood by those analysts who cheers government spending.