Public and Private Investment
One not particularly cute graph; no analysis, explanation, nor editorializing.
GDPI is gross domestic private investment.
NDGIC96 is Real Federal Nondefense Gross Investment.
SLINVC96 is Real State & Local Government Gross Investment.
Note that private investment runs at about 7 times the total of government investment at all levels.
Make of it what you will.
H/T to PK.
Cross posted at Retirement Blues.
UPDATE: In comments, Art raises the valid but trivial point that this graph compares nominal GPDI to real govt investment. Oversight on my part.
Here is is again, with GPDI adjusted by the implicit GDP Deflator, indexed to 100 in 2005. This brings the GPDI line down a bit relative to government investment.
Comparing nominal GPDI to real govt investment??
Good catch.
Fixed it.
JzB
Jazz
if i understand this… and it did take several mental operations… the graphs show that private investment has been six or seven times the value of total investment since 1995.
I am not sure why this is important, or even interesting. Not saying that it’s not, but that “without comment” may expect too much of your readers.
It reminds me of the hysterical pronouncements that Social Security is 50% of the national budget or some such figure. Really totally meaningless. In the first place why shouldn’t it be? (and in the second it’s not part of the national budget.)
So why does it matter?
Dale –
There is good and bad to posting sans commentary. On the one hand, I can’t be misconstrued or misquoted; on the other it gives the reader no guidance.
But, I think challenging the reader to engage his brain is not such a bad thing.
The 6 to 7 x multiplier is of passing interest, I guess. It merely shows that govt is not the leviathan that some would have us believe.
My real point, though, is that post-recession, private investment is pretty much back on a pre-recession track, while government investment at all levels is slumping.
But we hear that meanie anti-American socialist Obama has made the captains of industry cry, and now they are eskeered to invest due to the uncertain environment he has created.
Also, too – whence this Obama spending spree of which we hear so much?
Cheers!
JzB
oh! i think i shall change the name of my blog to valid but trivial
It’s better than “True but irrelevant.”
JzB
Jazz
thanks for the comment. i needed that.
thing is, there is a certain solipsism in the national character. assuming that if people “only use their brains” they will understand your profound wisdom only makes it worse.
i happen to think you are right about the “facts.” i think your presentation of those facts is difficult to understand. no doubt if i’d only use my brain…
(i still don’t know where the cutoff line between too much government spending and not enough is.
If I offered my own opinion it would be all full of words about specific programs and what good they are doing who, and whether we can pay for them, or are paying for them, and whether that matters.
magic formulas don’t work for me. usually these come from the bad guys and their economists. “taxes must be 19% of GDP or else,” top tax rates must be 20% or else, Social Security can’t be more than 12% or else…
no one bothers to look at the actual facts. Hey they have a “number” approved by “an economist.”
Dale –
thing is, there is a certain solipsism in the national character. assuming that if people “only use their brains” they will understand your profound wisdom only makes it worse.
I have no idea what this means.
Again, I have no profound wisdom to offer. Just facts and data.
i still don’t know where the cutoff line between too much government spending and not enough is.
I think the question is a red herring. The answer will be different under different conditions. Of course, your point about programs is well taken.
JzB