On Fri, Oct 22, 2004 at 11:58:12AM -0500, Dan Minette wrote: > > The source for my numbers is: > > http://www.gpoaccess.gov/usbudget/fy05/hist.html
Very interesting data, Dan. Thanks for posting the link. I graphed it here: http://erikreuter.net/econ/budget.png A couple things that jumped out at me while staring at the graph. Around both World Wars, government outlays spiked (as expected), and we ran a deficit. But government income also spiked. So taxpayers were asked to help pay for the war, as David mentioned. But in 2001-2004, outlays spiked BUT income dropped, just as David pointed out. The other thing I thought was interesting may not be apparent to people who aren't into stock market history. So, to give some very brief background, most market historians divide stock market history into "secular bear" and "secular bull" markets (secular in the sense of an "age" or long period of time). Generally, the last 80 or so years are classified as follows: 1921-1929 secular bull 1929-1949 secular bear 1949-1966 secular bull 1966-1982 secular bear 1982-2000 secular bull 2000-???? secular bear? I think it is interesting to look at the graph http://erikreuter.net/econ/budget.png and see that government outlays, as a percent of GDP, were generally: decreasing from 1919 to 1929 increasing from 1929 to 1953 slightly decreasing from 1953 to 1965 increasing from 1965 to 1982 decreasing from 1982 to 2000 increasing from 2000 to 2004 The correlation between long term trends of government spending as a percent of GDP and stock market performance looks very strong. Increasing government spending seems to go along with secular bear markets and decreasing government spending correlates with secular bull markets. I don't know what the causality is here (which one causes the other? or are they both caused by some other variable?), but I think the correlation is interesting. -- Erik Reuter http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
