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01/18/2009

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» The Big Dig from Crisis Talk - The World Bank Group
Georgi Angelov (Open Society Institute, Bulgaria) alerted me to two interesting blog posts on the deficiencies of large fiscal expenditure projects. One is by Gary Becker (Chicago) and argues that "recessions are a good time to increase infrastructure ... [Read More]

» Are Health, Technology and Science Spending Effective at Short-Term Stimulus? from Pure Pedantry
Health-infrastructure, information technology, and science research spending are clearly related to the success of our economy. They represent investments into intellectual property and human capital that increase productivity and create long-term grow... [Read More]

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Israel Tourism Consultant Christian Pilgrimage Tours are a leading choice for Christian Groups. Our itineraries are ideal for Churches, Ministries, religious leaders, as well as family and friends with a common belief in the Christian faith. Israel Tou... [Read More]

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Enzymn

–û—á–µ–Ω—å –ø–æ–Ω—Ä–∞–≤–∏–ª–æ—Å—å, –¥–∞–∂–µ –Ω–µ –æ–∂–∏–¥–∞–ª–∞.

michael webster

I think that the any stimulus has to bring about a trade that probably would not happen outside of a crisis.

Here is my suggestion.

The Chinese government is expected to buy US Treasury Bills, to prop up their current holdings.

The Chinese cannot export goods to the US because nobody wants to buy crap anymore, and the Chinese in response produce even cheaper crap.

The Chinese don't have a regulatory system at their local levels worth crap and to institute such a system would cost a great deal of money, possibly something that could only be bought with US treasury bills.

Anybody see a deal here?

blake

I agree that the government should be careful to waste as little as they can, which, historically speaking seems unlikely. I think though that you underestimate how much of the economy is dictated by the government at the moment. In a choice between government spending and well regulated (so not health care, the military, banks, the stock market, schools or pretty much anything) private sector growth the private sector growth is likely to be more efficient, sustainable, and make people rich without them skimming off the government dime(agriculture atm). Fortunately in my opinion we aren't in such a position, both our private and our public sector are grossly mismanaged.
I think our country doesn't have to worry so much about where it's pulling the workers from, how about the unemployment rolls, and ya alot of them are probably going to need extensive retraining, are you suggesting that the government should subsidize their unmarketable skills to spare them the time and hassle of learning to do something useful?
This isn't a downturn brought about by a short term liquidity crisis, the liquidity crisis is a symptom, and the root causes need to be addressed in a long term sustainable fashion. Since the government also wants to help lower unemployment by tightening the labor market spending on broadband, school buildings, computers for school children, modern technologies, research and development, converter boxes for the transition to digital TV, phone service to rural areas, sewage treatment plants and computerized medical records seems just what the doctor ordered (other than the converter boxes).
This is going to be ugly in the short haul and the long haul also. I have no idea what is going to end up happening to the deficit either, the government appears to be having no trouble borrowing cash at low interest rates, but how long can that last? How would the cost of the higher taxes to repay the debt compare with the nightmare of a debt holiday? Can you inflate it away? Ugly weirdness incoming, that's for sure.
On the bright side Obama utilized the web brilliantly in his campaign, there is some hope I think that he can use the internet to greatly increase government accountability, which is the main benefit the private sector has traditionally held as I see it.

Ulceliidiose

–±–æ–ª—å—à–æ–µ —Å–ø–∞—Å–∏–±–æ!–í–∑—è–ª–∞ —Å–µ–±–µ —Ç–æ–∂–µ-–ø—Ä–∏–≥–æ–¥–∏—Ç—Å—è.

Kneexothet

–±–æ–ª—å—à–æ–µ —Å–ø–∞—Å–∏–±–æ!–í–∑—è–ª–∞ —Å–µ–±–µ —Ç–æ–∂–µ-–ø—Ä–∏–≥–æ–¥–∏—Ç—Å—è.

Kneexothet

–±–æ–ª—å—à–æ–µ —Å–ø–∞—Å–∏–±–æ!–í–∑—è–ª–∞ —Å–µ–±–µ —Ç–æ–∂–µ-–ø—Ä–∏–≥–æ–¥–∏—Ç—Å—è.

Infasymn

–î–∞ —É–∂. –í —ç—Ç–æ–º –±–ª–æ–≥–µ —Ö–æ—Ç—å –∫–æ–º–º–µ–Ω—Ç–∞—Ç–æ—Ä—ã –Ω–æ—Ä–º–∞–ª—å–Ω—ã–µ.. –ê —Ç–æ –ø–∏—à—É—Ç –æ–±—ã—á–Ω–æ –≤ –∫–æ–º–º–µ–Ω—Ç–∞—Ä–∏–∏ –µ—Ä—É–Ω–¥—É –≤—Å—è–∫—É—é.

Andrew

On stimulus for Detroit, you write "Putting new infrastructure spending in depressed areas like Detroit might have a big stimulating effect since infrastructure building projects in these areas can utilize some of the considerable unemployed resources there. However, many of these areas are also declining because they have been producing goods and services that are not in great demand, and will not be in demand in the future."

As a longtime resident of the Detroit area, I find this appalling on a moral level: we don't deserve help unless we can prove we're valuable? On an economic level, it's a classic Catch-22. Detroit does not deserve economic stimulus unless it produces things people want. On the other hand, Detroit is unlikely to attract newer, more innovative businesses unless it can address its crumbling infrastructure, high crime, failing schools, and urban blight. So where does that leave us?

twojeanonse

Nice to see so good informations. Very good blog.

upholo

–Ø –≤ –ø—Ä–∏–Ω—Ü–∏–ø–µ, –º–∞–ª–æ, —á—Ç–æ —Å–º—ã—Å–ª—é –≤ —ç—Ç–º –ø–æ—Å—Ç–µ, –Ω–æ –ø–æ—Å—Ç–∞—Ä–∞—é—Å—å –≤—Å–µ —Ç–∞–∫–∏ –ø–æ–Ω—è—Ç—å.

upholo

–Ø –≤ –ø—Ä–∏–Ω—Ü–∏–ø–µ, –º–∞–ª–æ, —á—Ç–æ —Å–º—ã—Å–ª—é –≤ —ç—Ç–º –ø–æ—Å—Ç–µ, –Ω–æ –ø–æ—Å—Ç–∞—Ä–∞—é—Å—å –≤—Å–µ —Ç–∞–∫–∏ –ø–æ–Ω—è—Ç—å.

upholo

–Ø –≤ –ø—Ä–∏–Ω—Ü–∏–ø–µ, –º–∞–ª–æ, —á—Ç–æ —Å–º—ã—Å–ª—é –≤ —ç—Ç–º –ø–æ—Å—Ç–µ, –Ω–æ –ø–æ—Å—Ç–∞—Ä–∞—é—Å—å –≤—Å–µ —Ç–∞–∫–∏ –ø–æ–Ω—è—Ç—å.

upholo

–Ø –≤ –ø—Ä–∏–Ω—Ü–∏–ø–µ, –º–∞–ª–æ, —á—Ç–æ —Å–º—ã—Å–ª—é –≤ —ç—Ç–º –ø–æ—Å—Ç–µ, –Ω–æ –ø–æ—Å—Ç–∞—Ä–∞—é—Å—å –≤—Å–µ —Ç–∞–∫–∏ –ø–æ–Ω—è—Ç—å.

Flagelopweafe

–ü—Ä–µ–ª–µ—Å—Ç–Ω–æ)

beauctib

Опубликовал на своем блоге вашу статью, и напечатол там конечно-же обратную ссылку на вас. Но вот зашел посмотреть поевился ли трекбек, а его нет…

Jack

Andrew: I know very little about Detroit other than its history etc, and have been wondering about its potential second life. With its geography it's easy to see why it was a power in the heavy steel and auto era, and today with the same plus freeways converging etc it would seem to have some natural advantages.

But in mfg the plains and southern states are tough competitors, often "buying" factory placement with land and tax breaks.

There's a good point in saying "no sense investing in declining areas" say a mining town that's "done" but I'd think there is still so much in Detroit that it's more of a turnaround proposition and up to local politics and the city fathers to have a regeneration plan that would justify its getting federal assistance. There will surely be competition for what fed funds there are, and I take Obama at his word of trying to make every buck count.

Is there leadership there with a plan for the New Detroit?

Dave

I don't see how infrastructure spending can be used to stimulate the economy during all but the most protracted recessions. It will take months to get the bill passed, still more months to plan these projects, more months to acquire land, choose contractors, order material and supplies, and when all of that is done, then they can hire the workers. The likelihood that we will still be in a recession by that time seems very remote. More likely, the project will draw off workers from overheated sectors of the economy, stoking inflation. And when the projects are done, the workers will be laid off, just in time for the next recession.

Dave

I don't see how infrastructure spending can be used to stimulate the economy during all but the most protracted recessions. It will take months to get the bill passed, still more months to plan these projects, more months to acquire land, choose contractors, order material and supplies, and when all of that is done, then they can hire the workers. The likelihood that we will still be in a recession by that time seems very remote. More likely, the project will draw off workers from overheated sectors of the economy, stoking inflation. And when the projects are done, the workers will be laid off, just in time for the next recession.

neilehat

C'mon guys, Grosse Point is doing just fine. Don't Diss Detroit simply because most of it's Employers bailed out years ago and left the City holding the bag. Anyone with half a brain jumped ship as well and went elsewhere.

What are you're left with? Not much! Perhaps, we need not so much of an Urban Renewal Project, but more of an Urban Removal Project. Then we can start with a clean slate. Most major Cities across America are in the same fix. The infrastructure is so old, rotten, and toxic, lead and asbestos, not too mention, "brownfield" problems; it'll be cheaper and easier, to level, clean, and build anew.

alkatt

–±–æ–ª—å—à–æ–µ —Å–ø–∞—Å–∏–±–æ!–í–∑—è–ª–∞ —Å–µ–±–µ —Ç–æ–∂–µ-–ø—Ä–∏–≥–æ–¥–∏—Ç—Å—è.

Pies

up until the point of serious deflation private lending institutions will view any deficit spending as predatory. should deficit spending under normal circumstances increase inflation the value of private lending institution assets shall decline. confronted with such a prospect they shall employ their resources to ensure congress does not pass any bills that authorize deficit spending of large magnatude.

the problem is compounded as of late as the cost to organizing for private financial institutions has declined as the industry has become more concentrated. this is a uniquely american problem as european countries chose to buy into private institutions rather than to bail them out, thus increasing the autonomy of the state.

in my opinion, the quandry on these boards assumes a level of state autonomy for the United States that is in conflict with reality; in general, very complex economic matters are handled by assuming away political implications.It would be most awesome if the Hoover institution would draw from its sizable repository of talent to add a political scientist to the becker posner blog.

Jack

Dave: Almost everyone around today has is used to recessions being some brief nuisance like a speed bump in a parking lot; but my bet is this one is three or more years long, and even then, I'm concerned that we've some structural unemployment problem that will take a long time, if ever, to solve. But! I hope I'm wrong! if so am willing to put up with a dab of inflation while getting infrastructure et al up to par.

Ref

I wish I could be more optimistic about Obama's chances of turning the American economy around.

beauctib

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–≥–æ—Ä–¥–∞—Ö, —ç—Ç–æ —Ç–æ–∂–µ —Ç–µ–º–∞ –∏ –∏—Å—Ç–æ—Ä–∏—è, –ø–µ—Ä–µ—Å–º–æ—Ç—Ä–∏—Ç–µ —Ç–µ–º—ã.–Ø –ø–æ—á—Ç—É –ø—Ä–æ—Å–º–∞—Ç—Ä–∏–≤–∞—é, –º–Ω–µ —à–ª—é—Ç –Ω–µ –ø–æ–π–º–∏ —á—Ç–æ, –Ω–µ –∑–Ω–∞—é –∫—Ç–æ, —Å—Ç–æ–ª—å–∫–æ –º—É—Å–æ—Ä–∞, –º–æ–∂–µ—Ç –æ–Ω–æ –∏ –Ω—É–∂–Ω–æ, –Ω–æ –Ω–µ –≤ –¥–Ω–µ–≤–Ω–∏–∫–µ.–Ø —Ç–∞–∫ –ø–æ–Ω–∏–º–∞—é, –¥–Ω–µ–≤–Ω–∏–∫ —ç—Ç–æ —á–∞—Å—Ç—å —Ç–≤–æ–µ–π –¥—É—à–∏.–ù–∞–º –¥–∞–µ—Ç—Å—è –ø—Ä–∞–≤–æ –≤—ã–±–∏—Ä–∞—Ç—å - –ø–æ–ª—å–∑—É–π—Ç–µ—Å—å. –ê –∏–Ω—Ñ–æ—Ä–º–∞—Ü–∏—è –±–µ—Å–ø–æ–ª–µ–∑–Ω–æ–π –Ω–µ –±—ã–≤–∞–µ—Ç

frigeofs

–±–æ–ª—å—à–æ–µ —Å–ø–∞—Å–∏–±–æ!–í–∑—è–ª–∞ —Å–µ–±–µ —Ç–æ–∂–µ-–ø—Ä–∏–≥–æ–¥–∏—Ç—Å—è.

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