While headlines imply the admin secured huge new investments from companies and foreign countries that will drive big growth numbers, hopes for an investment-driven boom are likely to be disappointed.
So I don’t disagree that there is a desire to achieve this outcome and that it’s actively being worked on by the admin and others. I don’t think on a long term basis, the deals would work because I question that there is all of this dormant capital available. Even if it’s possible, who is to say that those countries won’t be impoverished too much in the short term to a realize a net benefit in the long term. The deals could essentially unwind if countries go into economic hardship and need to secure survival.
The country level deals are just an order of magnitude larger than they could plausibly finance. For instance the UAE has no shot at investing 1.4tln when the total economy GDP is only 500bln.
Totally agree on the scale mismatch — $1.4T from a $500B GDP country is functionally impossible. That said, I do wonder if we’ll see a push toward securitizing dormant state assets or sovereign wealth guarantees as a way to simulate that kind of investment flow. But even then, those kinds of arrangements break down fast under economic stress, especially in systems that lack monetary sovereignty.
but Bob, the headlines were so wonderful that they make people feel good about the future… isn’t this all about future expectations? if you will something hard enough, like economic growth, it will just come true?!
Its such a good smokescreen/bait with the headlines.
So I don’t disagree that there is a desire to achieve this outcome and that it’s actively being worked on by the admin and others. I don’t think on a long term basis, the deals would work because I question that there is all of this dormant capital available. Even if it’s possible, who is to say that those countries won’t be impoverished too much in the short term to a realize a net benefit in the long term. The deals could essentially unwind if countries go into economic hardship and need to secure survival.
The country level deals are just an order of magnitude larger than they could plausibly finance. For instance the UAE has no shot at investing 1.4tln when the total economy GDP is only 500bln.
Totally agree on the scale mismatch — $1.4T from a $500B GDP country is functionally impossible. That said, I do wonder if we’ll see a push toward securitizing dormant state assets or sovereign wealth guarantees as a way to simulate that kind of investment flow. But even then, those kinds of arrangements break down fast under economic stress, especially in systems that lack monetary sovereignty.
but Bob, the headlines were so wonderful that they make people feel good about the future… isn’t this all about future expectations? if you will something hard enough, like economic growth, it will just come true?!
#sarcasm #onlyhumorcansaveus
Headlines are easy. Reality is much tougher as these data show.