# How much longer can the Fed use QE to keep the economy going?

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com, or follow me on Twitter.

People are not having many children. This has a long term effect, which will last decades. QE will become more and more necessary, as the decades go by, if birth rates remain low. Of course, we could, instead, have the government build things. I live in NYC, I would like to see the government build a new subway system. I’d like to see a system of walkways above the streets, where people can ride their scooters without having to worry about automobiles. I’d like to see the government buy up more land and convert it to parks. We need a vast system of dykes, to keep the coasts safe, in a century when the oceans will be rising. For the New Jersey, New York and Connecticut tri-state area, I can think of $1 trillion in improvements I’d like to see. Other parts of the country also need improvements. Let’s say$10 trillion over all. Over 20 years, that’s an extra \$500 billion of spending a year. If we had that kind of stimulus, we would not need QE.

But birth rates are low, so demand is going to be depressed for many decades to come. So we will need something, either fiscal stimulus or QE.

By the way, when I say birth rates are low, I’m very much including China. The One Child Policy has global effects. World wide interest rates would be wildly higher if Chinese families had continued to have 4 to 5 children, which is what they were having right before the imposition of the One Child Policy. It’s because China has so few children that they have so much savings, leading to the global savings glut that has given us interest rates near 0%.

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