These are just a few posts where I make the case that too much government spending as a percentage of overall national income is bad for stocks and stocks go up in anticipation of the government spending going down: Stocks Do Worse When Congress Is In Session, Tax dollar collections plummet after the the Pelosi Congress took over, US economic liberalization and the stock market after the 1994 and 2010 congressional elections .
In Declining Economic Freedom Means Lower Expected Returns, I show how since 2008, America’s economic freedom has been declining at alarming rates: America has fallen from fifth freest economy in the world to 10th freest. This decline was in fact anticipated by the stock market crash in 2007 – 2009. Since then, the stock market has turned up in anticipation of the divided Congress in 2010 and the deadlock in Washington. (See below)
Federal deficit collapses
If President Obama wants to distract voters’ attention from the ongoing failure of Obamacare and the miserably slow recovery, he should simply direct everyone to this blog post. Under his watch, the federal budget deficit has collapsed by two-thirds, from almost $1.5 trillion in his first year as president in which he inherited a lot of emergency spending from the Bush administration and began spending the almost $1 trillion included in his ARRA to just under $0.5 trillion in the year ending last March.
Achieving Individual Economic Freedom
The only way to achieve economic freedom individually is to continue to grow your assets in spite of inflation. Investing in separately managed accounts in stocks of great companies can be great way to do that.
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