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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Hawkmoon who wrote (104777)	9/2/2009 8:46:30 PM
From: Elroy Jetson	Read Replies (1) of 110194

Spending on infrastructure projects merely provide paychecks while the project is going on. If debt is not being liquidated while this project spending is happening there is no progress out of the economic depression, merely a temporary reprieve. Let's say we spend a lot of money on a new electrical infrastructure or some other magic project. The payback time on this project may be very favorable but it will not increase long-term incomes to any degree necessary to make excessive debt to income more affordable. The interest rate on the new and existing debt will far exceed the income growth rate you hope to obtain. Increasing government debt to pay for infrastructure projects kills growth, just as increased consumer and business debt killed growth. I know Reagan and his jolly jesters told you a contrary story, but it was all a pack of lies. The liquidation of excess debt instantly frees up vast amounts of income available for investment and spending. If you fail to deal with this underlying debt problem, the economic depression hangs on and on. .

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