Concept of an Infrastructure Bank getting more legs on the left.
Here's hoping the bank bonds are issued with a nice high yield for investors... this zero Fed rate is a killer.... ;)
This was the first time that Clinton, who has long supported the formation of a government-controlled bank to invest in national infrastructure projects, cited the Clinton Global Initiative—the flagship arm of her family’s controversial foundation—as an investment model for her proposed bank.
Shaking Down Foreigners Isn't Enough: http://t.co/IiYgwX3d5D Hillary Calls for Infrastructure Bank to Resemble Clinton Global Initiative
— Gumlegs (@Gumlegs) October 1, 2015
Why do we need this again? whats the difference between NIB funding and Congress simply appropriating money (which they would have to do anyway)? Why do we want rich people to get a piece of this action? Im confused why people think this kind of thing is important or even necessary.
ReplyDelete"whats the difference between NIB funding and Congress simply appropriating money "
ReplyDeleteThe other way would increase the deficit/debt....
Looks like they want to take the savings and invest it in these bank things that will probably issue bonds and/or dividends that yield way more than what the Fed is currently paying on USTs...
They are trying to bypass monetary policy by creating an entirely new system... good work if you can get it....
Bypass an intransigent congess
ReplyDeleteBypassing austerity by adding a new account where you can build up 'debt', but wouldn't make much difference if everything is going to get consolidated under government 'liabilities' in the end.
ReplyDeleteSupport might peter out depending on how fast the Fed raises..
ReplyDelete"Looks like they want to take the savings and invest it in these bank things that will probably issue bonds"
ReplyDeleteThat's precisely the same mechanism as issuing Treasuries or Gilts. The 'spending' is issuing the bonds, just as Kalecki pointed out.
Bond issues are the splitting of the zero that expands the monetary capacity of the economy - and they affect monetary policy by suppressing asset prices and altering yield curves elsewhere.
You then end up taxing or bond issuing to pay the 'savers' to save, when it is the paradox of thrift coming from those savings that's the problem in the first place.
Utter madness.
Everything depends on who gets the loans, and how much interest they have to pay.
ReplyDeleteIf an infrastructure bank is just a regular bank using private and government capital to finance lending for private capitalist infrastructure development, it could easily turn into a subsidized neoliberal racket for creating a new class of wealthy oligopolistic infrastructure barons.
Who is going to own and operate the new infrastructure when it's all done? The public? Or the Clintons' global corporate cronies? States and municipalities running the infrastructure at cost and distributing the operating costs progressively and the benefits equally? Or fat cat profiteers and toll collectors making big bucks from the public?
Creating an infrastructure bank is the easy thing. Employing it to advance the common good and reduce concentrated capital power is the challenge. The devil is all in the details.
And of course, if underdeveloped parts of the country need better infrastructure, one approach is just to pay for it the old fashioned way: progressively tax the whole population and spend the revenue where it is needed.
It doesn't look like an actual bank that can leverage. .. looks like a domestic IMF.... cant wait to see the US domestic versions of the troika descending upon the states and municipalities. ...
ReplyDeleteUtter madness
ReplyDeleteCompare the change in account for SS funds collected through FICA back in the 80's when Congress agreed to put the funds into the TGA for use in spending and credit securities accounts instead of leaving the funds in sequestered deposit accounts that could not be used for spending. The government was "borrowing" funding from itself through the illusion of change the chart of accounts by adding a new account.
How's that for "ledgerdemain"? The magic of accounting.
Then W comes along and says the securities are just bits of paper in a file box somewhere. ROFMAO.
So just politics.
ReplyDelete