GOVERNMENT SPENDING & SLOWING SAVINGS ARE STRANGLING CAPITALISM
This is one of those charts that gets to the root problem!
Bottom line: We simply have an insufficiency of savings and there is no political will to change it!
- The green line shows the national savings rate. It is currently at 3%. It is historically 6%. We are running half of normal. The shaded area shows the private sector, which is running at 9%. That’s pretty good. The red line shows the government sector and it is running at -6% and dragging down national savings. That is where the problem lies.
- But it is not going to stay there – the government deficit is moving even lower into negative territory.
- The government deficit will continue to grow. Tax cuts and the bipartisan agreed-upon increase in spending do not lead to deficit reduction.
- Bottom line: What it says is there is an insufficiency of savings to absorb ever-larger budget deficits. National savings is not staying at 3%, it is going to decline. Real investment is going to decline. It is possible the private sector will save more but that means there will be less consumption.
- In other words, the public sector is going to constrain the private sector and the economy. (SB: Debt acts as a noose around the economy’s neck.)… and guess which sector provides the basis for better growth, the private sector or the public sector?
- In other words, the government sector’s budget deficits are too large for the level of savings
[SITE INDEX -- MACRO: US - FISCAL]
MACRO: US - FISCAL
MATASII RESEARCH ANALYSIS & SYNTHESIS WAS SOURCED FROM:
SOURCE: 05-19-19 - WorldOutOfWhack.com - "Lacy Hunt: This Is One Of The Most Important Charts In Economics"
All Originally Sourced from FULL PRESENTATION by Dr Lacy Hunt at the Mauldin Strategic Investment Conference:
FAIR USE NOTICEThis site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.
NOTICE Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. MATASII.com does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.