Analysis Topic: Stock & Financial Markets

The analysis published under this topic are as follows.

Thursday, July 12, 2012

High Government Deficits "Crowd Out" Stock Market Returns / Stock-Markets / Government Spending

By: Dan_Amerman

“Crowding out” is an obscure term if you're not an economist – but this replacement of the private sector economy with government spending may end up being one of the largest determinants of your standard of living during retirement.  The investment problem is that the past, present and likely future of the US economy is one of rapidly growing government spending.  Because the investment models that drive conventional financial planning assume a rapidly growing private sector, this sets up a fundamental competition between government growth and private sector growth for their shares of a single economy, and may lead to a collapse of stock market values and conventionally invested retirement portfolios.