Juggling Dynamite

The US Presidential debate tonight will doubtless spend much breath on Republican and Democrat plans and promises to “create jobs”. The truth (explained in this clip) will most likely be overlooked.

“Professor Antony Davies provides evidence, via empirical data from 1955, that there is no connection between federal spending and economic improvement -it merely adds to government debt.”

Here is a direct link.

Good piece in the Washington Post on the Chinese realty bubble. See: As China’s economy slows…

“As home prices have skyrocketed, many Chinese households have gone all in on real estate by pouring years of savings into buying as many homes as they can.

But as the country’s economy slows to its worst pace in years, China’s dependence on real estate for growth — it’s a bigger driver than even exports now — has put the government in a tough position.

Allow prices to continue rising and help the economy in the near-term, but the real estate bubble gets worse. Cool things off and the entire economy slackens too much…”

Bill Gross, Co-CIO, founder & managing director at PIMCO, outlines America’s severe spending addiction in his latest investment outlook. Here is a direct link.