Wednesday, August 29, 2012

Extraordinary Peace-Time Budget Deficits


During World War II, American government spending as a percentage of GDP was about 45%. It is over 20% now, with the administration's spending habits. We can, in fact, become another Greece-like world mendicant.

What does this mean for small and large businesses? Especially those who cannot compete with big government competition, in politically-favored industries?

Government spending displaces funds available for the private sector, particularly as interest rates rise. When that occurs, firms seeking funds are less likely to get them. Yet, they are the entities which mainly create worthwhile jobs.(See the Earl J Weinreb NewsHole® comments.)

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