Commentary
With politicians squabbling over lifting the debt limit, few are paying attention to the ongoing “Japanification” of the U.S. economy. What do I mean by “Japanification”? With a zero to negative debt multiplier on economic growth, the ongoing spending spree by the federal government continues to push the United States toward the same slow-growth economy as in Japan.
We previously discussed the Congressional Budget Office’s (CBO) long-term debt projection through 2050 compared to the historical exponential growth trend of the debt. This suggests that the CBO’s projections, as always, are well short of reality. As we will discuss, this ensures poor economic returns….