In every economy there are choices or allocation of resources and comparison to other countries. Every time the economy grows, there can be surpluses which can mean one of 2 things – either collect less or do more. In every country there are people are less well off than others so doing more is always an option, the big problem is the turnout at the election box tends to be less. The other choice is collect less by cutting taxes and that is an option because those that pay more in taxes vote in higher percentage. What should politicians do? If you think back before the holidays, the US congress had a vote on deficits and eventually the bill passed. The US deficit to GDP is about 6.5%.

In an article from Reuters, the second biggest economy in the world is China. For the past 2 decades China’s economy was in a growth state and running surpluses or it was the envy of the world’s economy. Then COVID happened the economy was shutdown by government regulations and property prices fell, along with high local government debt and slowing consumer demand which led to a weakening economy which led to deficits. The Chinese government and the US government are in the same position – the debt to deficit is rising with China’s number to come in around 4%.

The Chinese government is projecting growth by 5% which is a long way from the double digit growth of the past. In China the press looks to the Politburo. The government had been projecting a 3% deficit but has increased it to 4% which translates into an extra $255 billion in spending.

Linking to dividend paying stocks, in most things in life including with investing there are alternatives or choices. With all alternatives there are positive and negatives with each but one needs to be selected. The hope is with increased data analysis and a helping of AI, the expected outcomes can be narrowed or can be switched before too much time has elapsed. There are always choices or alternatives, and the idea is to have looked at the alternatives before you make a decision, not to justify it afterwards. The is always homework to do, benchmarks to make and be ready to know when your idea did not work. Often times investing in profitable companies gives you the luxury of time to make your decision.

There are more questions than answers, till the next time – to raising questions.