OH, GOODY: Treasury in plans for record debt sale. “The US Treasury on Wednesday opened the floodgates of government bond issuance, revealing plans for a record debt sale in February and more frequent auctions in the months to come. The announcement came amid growing fears about US government deficits and sent the yield on the benchmark 10-year Treasury note rising to 2.95 per cent, up from just over 2 per cent at the end of December. The rise in Treasury yields has been pushing mortgage rates higher, complicating efforts to revive the economy.” So the “stimulus” is now a drag on the housing market. . . .
Posted at by Glenn Reynolds at 10:56 pm
I hate to say it, but I told you so.
If there is a private sector credit crisis, how will government borrowing money to pay for the planned increases in spending do anything to make private capital more generally available? Doesn't the government actually compete for private capital? It seems to me that if I, as an investor, choose to put my money into treasury notes or government bonds, that money is no longer available for investment in corporate stock or a bank where it could be used to finance job growth or expansion. If that's the case, just how will private loans become easier to obtain?
If government is not the answer, then why does government act in a Keynesian manner? Simply put, power. The government loves Keynes, because Keynes puts the government in charge. Economics though, at its heart, is about the purchasing decisions that you make. You, and only you, know what's best for you. That is what it means to be free. When you give those choices to someone else, you lose.
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