Government Spending Archive

happy new year!

The above chart is real final demand. Finally back to long term average. A few charts below that show what’s happened to govt under Obama. A capex related charts not looking so good. And the auto industry has a bit of inventory to work off. ...Read More

Credit check, CBO suggestions

Nothing happening on the credit expansion side of consequence that I can detect: Seems the CBO should stick to simple reporting: CBO Presents Options for Reducing the Deficit: 2015 to 2024 from the Congressional Budget Office The Congress faces an array of policy choices as it confronts the prospect of large annual ...Read More

State and local govt charts

The bulk of the boost is coming from state and municipal governments. After tightening their budgets for three years following the end of the recession, they began stepping up spending in 2013 and continued to do so this year Except state taxes are growing faster, a headwind for the private sector. But ...Read More

Employment and related commentary

Seems universally agreed the labor market is ‘improving’ even as the jobs chart has been downward sloping since the peak in April, wage growth has softened from relatively low levels, and the work week fell back some. It’s all screaming ‘lack of aggregate demand’ in no uncertain terms. That is, the deficit ...Read More

Bill Mitchell on the secular stagnation hoax

The secular stagnation hoax ...Read More

Potential GDP Revisions and/or Reversals

A couple of things stand out for either revision or reversal next quarter. One is the increase in govt spending and the other the increase in net exports. Together they added about 2% to yesterday’s Q3 GDP release.  So excluding those two suspect numbers Q3 would have been reported as up only ...Read More

There is no right time for the Fed to raise rates!

There is no right time for the Fed to raise rates! Introduction I reject the belief that economy is strong and operating anywhere near full employment. I also reject the belief that a zero-rate policy is inflationary, supports aggregate demand, or weakens the currency, or that higher rates slow the economy and ...Read More

Macro update

First this, supporting what I’ve been writing about all along: Here’s Proof That Congress Has Been Dragging Down The Economy For Years By Shane Ferro Oct 8 (Business Insider) — In honor of the new fiscal year, the Brookings Institution released the Fiscal Impact Measure, an interactive chart by senior fellow Louise ...Read More

The 10th Plague

Several years ago I began using the analogy of the 10th plague of the Old Testament, the idea being that the EU wouldn’t move away from austerity until it brought down Germany itself. It’s looking like that day is getting a whole lot closer, as austerity has not only damaged Germany’s export ...Read More

Who’s ‘we’?

And they still are? The idea that the deficit is too small remains a non starter for the mainstream. In the face of all evidence to the contrary, including over 2 decades of it in Japan, they continue to believe ‘monetary policy’/low rates and QE supports aggregate demand. Full size image ...Read More