What causes budget deficits, and how can we solve them?

My last couple posts have shown how much US government spending has mushroomed over the past century and in which categories. In this post we’ll look at federal budget deficits. History of budget deficits The graph below shows federal budget deficits and surpluses from 1955 to 2018. These are inflation-adjusted 2009 dollars from OMB. A …

What government spends our money on, and how it’s changed

Last week’s post discussed the large increase in US government spending over the past century. This week, we’ll look at what the federal government spends our money on, and how it’s changed over time. 2017 spending breakdown First, let’s look at a breakdown of the $4.0 trillion of 2017 federal spending. The data in the graph …

History of growth in government spending

The trend over the past century has been ever-larger government. Like a snowball rolling downhill, small at first but growing larger and larger. I think some people don’t fully grasp how large government has become. Certainly most people from a century ago would find it difficult to comprehend the size and reach of government today. …

Are stock buybacks bad for the economy?

Some people denounce stock buybacks. They’re a scam! They’re destroying the economy! They only benefit the rich! Are stock buybacks bad for the economy? Let’s take a look. Definition A stock buyback is when a company buys back shares of its own stock. This reduces the total number of shares held by the investing public. …