It will also make it harder to solve the coming entitlement spending wave that will narrow the policy options for other liberal priorities.
We used a simple 46-year lag for the peak in spending of the average household, what we call The Spending Wave (which we covered in a past blog).
Two years after capital spending is squelched demand will catch up to supply, and profits will reappear, driving a new wave of capital spending.
"It is well known that PFI contractors have done very well over the years from the huge wave of spending that has taken place in the NHS, " he said.
In light of the ailing health of the British economy and the fact that the largest wave of spending cuts since 1945 are just reporting for duty, Governor King sounds in no mood to be adding to the weight of struggling households and corporations by restricting monetary policy for the sake of beating back price increase set in motion by the government.
This should last until the next wave of capital spending creates the next oversupply.
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Tax-exempt groups became a popular channel for the new wave of political spending.
On the contrary, if China decides to continue with its traditional investment-led growth model, it may see a fresh wave of infrastructure spending and boost demand and prices of natural resources.
Dent's confidence, as always, is based upon a simple demographic fact: The baby boomers born between 1946 and 1961 are hitting their peak spending years in a rolling wave ending around 2010.
As it turned out, though, this was to be the last big wave of technology spending in recent U.S. military history that came to fruition (some parts of the Reagan-era plan, like missile defense, did not pan out).
"What the World Cup did was increase maybe consumer confidence and gave that sort of wave of euphoria which lead to stronger consumer spending, " said Alexander Law, chief economist at Xerfi, an economical analysis company.
Stockton is just the latest example of what may become a wave of municipalities driven into bankruptcy by a combination of uncontrolled spending and shrinking tax revenue.
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Optimists like to think that a wave of post-partum euphoria will, for example, help boost consumer spending.
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