private investment

Do Earmarks Crowd Out Local Private Investment?

The extent to which government spending either complements or crowds out private investment has long been one of the most heated debates in economics (and politics).  Generally economic theorists posit that an increase in government spending drives up interest rates, which increases the cost of private investment, accordingly reducing such investment.  Most macroeconomic models are build on this relationship. 

Big Business Not Investing

In a recent post, I argued that while third-quarter GDP was positive, the underlying data revealed that U.S. private investment was still in the toilet. While government spending might be providing a short-term “sugar high” for the economy, U.S. business investment remains in recession. I speculated that Obama’s anti-business agenda is likely one cause of the problem.

The Death of Private Investment

The Bureau of Economic Analysis released third-quarter gross domestic product numbers yesterday, and overall real growth at 3.5 percent was pretty good.

But examining the components of GDP reveals a more disturbing picture. While consumption, exports, and the government sector were up, private investment has fallen through the floor.

Social Security Is Running a Surplus…Oops

For years, opponents of Social Security reform have told us that there is no need to rush into changing the program because, after all, Social Security is running a surplus today. Well, according to a new report by the Congressional Budget Office, not so much.

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