What Crowding Out?

Posted by Joseph Y. Calhoun, III

Keynesians assured us that deficit spending right now would not crowd out private investment. Yeah, I’m calling BS on that one:

Commercial and Industrial Loans

US Government Securities at Commercial Banks

US Government Securities at Commercial Banks

If banks didn’t have the option of borrowing from the Fed at zero and hiding in Treasury and Agency securities, maybe they’d be making some loans right now.

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