nightrider Posted April 4, 2013 Share Posted April 4, 2013 The Government dont think they are doing a good job, they think that they can do it better The reason banks won't lend to such FTB is they are very high risk of not paying the loan back, coupled with the likelihood the house will fall in value in many areas of the country - so its hardly a sensible idea for the government to then step in and lend them money! Reckless lending caused the huge financial crisis - so why is the government encouraging more of it? Link to comment Share on other sites More sharing options...
MrSmith Posted April 4, 2013 Share Posted April 4, 2013 Short-term boost? There is stimulus during the construction phase that is true. But the impact of the right projects lasts well into the future. It's not pyramid economics. It's laying the foundations for sustainable economics. Do some research on the multiplier effect in economics. You will then hopefully understand that I am describing a process that will fuel sustainable growth if the right projects are selected. You will also hopefully understand that Osborne has created in effect a reverse multiplier, effectively talking us into a slow motion downward spiral where huge debt is accumulated with nothing to show for it, where more people are driven to the breadline, where future generations are handed the debt and being the inheritors of crumbling infrastructure have limited options for paying it back. Harvard economist Robert Barro Peacetime government spending is almost zero boost to economy. He says the multiplier effect on the economy of such peacetime government spending will be “insignificantly different from zero.” The existing empirical evidence on the response of real gross domestic product to added government spending and tax changes is thin. The results mostly favor tax rate reductions over increases in government spending as a means to increase GDP. Link to comment Share on other sites More sharing options...
I1L2T3 Posted April 4, 2013 Share Posted April 4, 2013 Harvard economist Robert Barro Peacetime government spending is almost zero boost to economy. He says the multiplier effect on the economy of such peacetime government spending will be “insignificantly different from zero.” The existing empirical evidence on the response of real gross domestic product to added government spending and tax changes is thin. The results mostly favor tax rate reductions over increases in government spending as a means to increase GDP. Barro knows that we are in a crisis. He must be able to see the devastating impact austerity is having on countries in Europe. He must see the debt spiralling further out of control. Yet he argues we still need more of the same. He's a poster boy for classical economics gone badly wrong. Link to comment Share on other sites More sharing options...
MrSmith Posted April 4, 2013 Share Posted April 4, 2013 Barro knows that we are in a crisis. He must be able to see the devastating impact austerity is having on countries in Europe. He must see the debt spiralling further out of control. Yet he argues we still need more of the same. He's a poster boy for classical economics gone badly wrong. Yes a crisis that was caused by too much borrowing, that can’t be solved by borrowing more. Link to comment Share on other sites More sharing options...
I1L2T3 Posted April 4, 2013 Share Posted April 4, 2013 Yes a crisis that was caused by too much borrowing, that can’t be solved by borrowing more. Then how come Osborne is borrowing more? Link to comment Share on other sites More sharing options...
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