zlacker

>>tedsan+(OP)
The US appears to be fully in the grips of centralized economic autarky. A tiny coterie of industrialists who have the President's ear decide how to allocate a gigantic amount of capital for their pet projects while the state raises tariffs and implements bans to protect them from competition.

Didn't go well for South America in the 60s and 70s but perhaps, as economists are prone to saying, "this time will be different".

>>rchaud+592
Private capital. That detail seems to derail your whole comment.

>>ahmene+Sm2
How so? Does this capital being private ensure "this time will be different"?

>>aylmao+Tn2
> Does this capital being private ensure "this time will be different"?

South America didn't have a mix of domestic and foreign investors deploying massive quantities of private money into capital assets in the 60s and 70s. They had governments borrowing to fund their citizens' consumption. Massive difference on multiple levels.

>>JumpCr+xo2
> They had governments borrowing to fund their citizens' consumption.

The problem here being that it was money spent that was never earned back, and money that eventually had to be paid back, right?

This can also happen with private capital. 2008 was a bust caused by private banks, for example. AI hasn't proven to be profitable yet [1], and I'm not sure it'll makes a difference, for the success of projects like this, wether the money is coming from government or not.

In fact, if the 2008 bank bail-out, auto industry bail-out, the Silicon Valley bank prop-up, and other such actions by the US government are considered [2], if this turns out to be a bubble it will be taxpayers who end up fronting the bill.

[1] https://www.cbc.ca/news/business/ai-generative-business-mone...

[2] https://www.investopedia.com/articles/economics/08/governmen...