The Cost of Rejecting Free Money

It's Officially Stupid. We've got trillions of dollars in desperately-needed infrastructure projects all across the country, and 10 million people in desperate need of decent jobs.

If creating 10 million jobs to build that infrastructure cost us an additional trillion dollars added to the national debt, it would still be worth it because of the economic growth from that investment.

But a trillion dollars of infrastructure investment would not add a trillion dollars to the national debt, or anything close to a trillion dollars.

That's because the U.S. government currently has available to it trillions of dollars in free money.

Paul Krugman, who, for the record, has been dead-on right about everything economic for the past 12 years at least:

That’s right: for every maturity of bonds under 20 years, investors are paying the feds to take their money — and in the case of maturities of 10 years and under, paying a lot.

What’s going on? Investor pessimism about prospects for the real economy, which makes the perceived safe haven of US debt attractive even at very low yields. And pretty obviously investors do consider US debt safe — there is no hint here of worries about the level of debt and deficits.

Now, you might think that there would be a consensus that, even leaving Keynesian things aside, this is a really good time for the government to invest in infrastructure and stuff: money is free, the workers would otherwise be unemployed.

But no: the Very Serious People have decided that the big problem is that Washington is borrowing too much, and that addressing this problem is the key to … something.

For the U.S. to refuse to grab every free dime investors will give us and spend it repairing about 90 percent of what's wrong with this country - fixing crumbling infrastructure and putting people back to work - is policy malfeasance on a galactic scale.

As Charles Pierce puts it:

If we want to invest in infrastructure, which we desperately need to do, then we should just borrow money at the current historically low rates and fix the damn infrastructure. Put people to work. Give them money to spend because, as we know, the only sensible reaction to foolishness like this is Fk The Deficit. People Got No Jobs. People Got No Money.