Originally Posted by blondieyo
they assume that the money the government would originally have borrowed will be loaned to the private sector, instead of to the government, where there will be a greater profit made from the same money
To me it sounds like that's assuming that there is currently a huge amount of private enterprise that's not growing ONLY because they can't get a loan from anybody. I've heard of some small businesses that are running into problems with getting financing from cautious banks, but I still have to believe that if there were really a group of industries in the U.S. that had real potential to collectively put millions of unemployed people back to work, investors would still be lining up to give them loans so they could reap the benefits as well. China is still loaded, the big banks are still making huge profits, why wouldn't they want to use that money to make more if they thought they could? That's what investors do.
Maybe if the government did borrow less, investors would be willing to put more money into a few things that they currently see as too risky relative to the security of government bonds. But are there really so many of those risky new ventures in the U.S. that it would turn around an entire economy? Pretty hard when there are companies overseas that will do the same thing for way less money IMHO...