Euphoria in Fantasy Land as Everyone waits for the Blow-off

This morning while watching CNBC it makes one think that things could not be better.  Of course that assumes you ignore increasing deficits and trade wars.  But looking deeper into economic research….

The Relationship of Government Deficits and GDP Growth

When you drill down into the latest US tax changes it becomes very apparent that this is not about growth, it is about increasing government deficits and sending the money to the non-growth sectors.

A little research into economic models will show you that the effects on GDP growth using government deficits is much different in a weak economy (i.e. 2008-2009) and an overheated asset bubble (i.e. 2018 ).

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