02 May 2018

"We will loan you our trillion dollar tax cut," investors tell government

Here is an interesting pair of numbers.

In the first quarter of 2018, US companies announced $242 billion in stock buybacks. At that pace it will hit nearly one trillion dollars for the year. 

In the first half of the year, the federal government will run a deficit of $600 billion. At that pace it will borrow roughly 1.2 trillion dollars for the year.

Put differently, corporations have a trillion more than they can spend this year and the federal government needs a trillion more than it has. 

It sounds like an onion headline: "We will loan you our tax cut," investors tell government.

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