Growth without investing money. Tidö Agreement Finance Minister Elisabeth Svantesson advocates i an interview with Dagens Nyheter a policy that emphasizes increased growth to solve Sweden's investment needs. The books"The deficit myth” by Stephanie Kelton and “The entrepreneurial state” by Mariana Mazzucato raises questions about Svantesson's proposal. Svantesson suggests that growth can be achieved without the state creating money itself.
Kelton and Mazzucato question the idea that the government can effectively achieve growth without the government creating money. These two economists argue that government-created money can finance necessary investment and promote economic growth. This can apply, for example, to areas such as infrastructure, education and environmentally friendly initiatives. Their reasoning casts doubt on Svantesson's proposal to maintain a policy of restraint and avoid creating money to finance investment. Svantesson is afraid of a fairly low national debt of only 75%. For me, this means that she does not concretely address our deficits in staffing, sick leave, railways, roads, water resources. But that's the way it is less government investment means that society has to rely on private actors. This makes capital richer. But they often turn a blind eye to the needs of the poor.
Risky mixing in private capital
Furthermore, Svantesson suggests that the government wants to carry out investments with the support of private capital. The finance minister also suggests that structural changes to make the people work even harder may be needed. Svantesson does not want the state to take on debts. But this is rarely a viable solution.
Investments in collaboration with the private sector can often be very costly and ineffective for society as a whole. A clear example is the construction of the New Karolinska Hospital. The cooperation with private actors there resulted in significant cost overruns and problems. Another example is when the state mixed private capital support with state building subsidies of cheap rental properties in the 1980s. This made production much more expensive and may have contributed to the 1990s financial crisis.
Private investments are not a solution to Sweden's investment needs. It is not necessarily an easy or effective strategy. It may be more beneficial for the government to consider alternative financing methods, including government-created money. This can ensure that investments benefit society as a whole and not just certain private interests. #Economy #Growth Policy #StateFinancing #PrivateCooperation
The problem is that there is no reason for private capitalists to invest if there is not reasonably certain someone who wants to buy up the increased production the investment would lead to. They like to call themselves "venture capitalists", but risks are the last thing they want to take.
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