Do We Need More Public Sector Investment?

Richard Murphy is the brains behind individuals’ QE, though it’s debatable concerning how appropriate the term “brains” is. Britain needs more investment, whereas PQE is not befitting China because China has an surplus amount of investment. I smell misunderstandings of issues. You wouldn’t think it, but Murphy is an accountant. And as every clued up accountant understands, when there’s an increase popular for anything, that induces a proportion of relevant makers to invest more!

Put another way, when deciding on a bank or investment company for a loan to make an investment, there’s nothing at all that induces the lender to help make the loan like the sight of hoards of customers coming thru leading door. Thus the recommendation a general increase in demand does not lead to more investment is ordinary nonsense. That “more demand leads to more investment” point certainly applies to the PRIVATE sector.

But it will also apply automatically to the general public sector, assuming those who do investment appraisal in the public sector know what they’re doing. Do we need more public sector investment? And where is the frustrating clear evidence that we need tons more public sector investment? There’s a huge amount of debate over if the suggested £30bn HS2 rail project in the UK is worthwhile. As to streets, the traffic flows pretty openly on 90% of streets 90% of that time period in the UK. Obviously that’s not the case in rush hours. But then if you build so much street that traffic moves freely in hurry hours, then there’s over-capacity at other times.

As for the route tunnel, the original investors have lost all their money nearly. One of the biggest investment items in any country is housing. In the united kingdom there’s a shortage of housing certainly, but the known reasons for that lack are complex and much disputed. One of the favorite explanations is municipality refusal to allow building on agricultural land brought about by pressure put on local governments by people living in agricultural areas who don’t want loads of new houses in their area.

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Note: An updated version of the next post are available at this hyperlink. Each month, the Treasury Department posts updated estimates of the foreign holdings of U.S Treasuries by country as of this link. It also posts quotes going back to March 2000 at this link. The next graph shows the totals for everyone countries by the type of treasury security and the totals for the three countries with the largest holdings. The crimson collection shows the grand total of all treasury securities kept by all international countries, public and private. As is seen, calendar year it has been increasing progressively since early 2002 and has accelerated somewhat before.

The yellow series shows those securities held by “official institutions”, described on web page 7 of the Report on U.S. Official institutions consist primarily of national authorities and multinational institutions mixed up in formulation of international monetary policy, but likewise incorporate national government-sponsored investment funds and other national government organizations. Data on such institutions are collected separately because the motivations behind holdings of official institutions varies from those of other investors.

More details on short-term and long-term personal debt securities can be found on web page 7 of the Report on U.S. The other three lines show the holdings of the three countries with the biggest holdings. The actual resources and figures for both of the above mentioned graphs are available at this link.