Elizabeth Warren is punching back against her own embarrassing “no one got rich on his own” rant and Scott Brown’s devastating viral (350k+ 800k views) video.
Warren is doing so by insisting that we need to catch up with China on infrastructure spending.
Warren’s campaign just released this ad:
Warren has just demonstrated how clueless she is and how she is unable to look beyond government-spending talking points.
China started from a much lower point of development, so it has to spend more on infrastructure just to catch up.
China’s massive spending on infrastructure, intertwined with real estate construction, also has created a bubble of cities without people and bullet trains with no riders:
China is rife with overinvestment in physical capital, infrastructure, and property. To a visitor, this is evident in sleek but empty airports and bullet trains (which will reduce the need for the 45 planned airports), highways to nowhere, thousands of colossal new central and provincial government buildings, ghost towns, and brand-new aluminum smelters kept closed to prevent global prices from plunging.
The Chinese government is trying to manage the bubble:
Moreover, in 2008, a nearly trillion yuan stimulus program had developers building up China residential properties in hopes that the urban trend would spike. They built, but the people didn’t always come. While the urban trend remains in place, many of those properties remain vacant, either as unsold developments or as investment properties without anyone living there.
We also saw in the 2009 Stimulus Plan in the United States how funding infrastructure projects for the sake of funding infrastructure projects led to wasteful projects like sidewalk reconstruction.
Warren’s answer to everything is to throw more government money at it. How’s that working out for us?
Elizabeth Warren may think she’s punching back, but she’s actually just shooting herself in the foot, once again.
Update: From Todd at WRKO Boston:
In her new ad, Liz Warren complains that China is investing 9% of its GDP in infrastructure while our spending is running at around 2.4%. My rule of thumb is that whenever politicians are offerings statistics, there’s little truth to what they’re saying. The Warren campaign isn’t breaking the pattern.
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