Wednesday, November 12, 2008

Chinese Stimulus Plan: A Pig In A Poke

New rail bridge over the Yangtze in Jiangsu Province
There has been beaucoup bloviating over China's proposed $586 billion stimulus plan, much of it to the effect that we Yanks could do an awful lot for our own crumbling infrastructure with that kind of dough.

I found all this talk kind of dissonant but couldn't figure out why until Barry Ritholtz over at The Big Picture set me straight: China has a centrally planned and carefully managed economy. It is not proposing new spending that did not previously exist. It is merely moving resources from one region to another. So there.

More here.

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