The markets provide countless opportunities for stock traders.
There are thousands of publicly traded stocks in the US market. And even more ETFs and other funds.
Each of these provides an individual opportunity to buy low and sell high.
Behind all of these stocks is one of the globe’s largest economies – that of the United States, with nearly 23 trillion dollars in gross domestic product (GDP) as measured by the US Bureau of Economic Analysis (BEA).
And of that, the single biggest component of the US GDP is spending from Uncle Sam.
Uncle Sam is a relentless – if not the ultimate spendthrift.
No dollar spent is too much, and more is more – with more being better at least as the guardians of our tax dollars are concerned.
US annual government spending continues to go higher and higher. And over the past 50 years, the rate of government spending has soared by 1,428%.
US Government Annual Consumption — Source: BEA & Bloomberg
This represents an unbelievable chunk of the US economy that is only getting bigger.
And in turn, each and every single dollar of this comes at the expense of what could be used by all of the companies and funds that we can profit from through our trading.
This represents a big headwind that we have to overcome as we seek out new trades to make in privately run companies that are behind the thousands of stocks in the markets.
But we’re up to the task. As each and every week, I overcome this and plenty of other headwinds to find the next surge stocks for you that I include in the Watch List inside Traders Daily Direction.
Still Not Enough for Politicos
Despite the trillions spent already, politicians are at it again…
This time, they’re facing off over the federal budget in their favorite game of chicken.
Washington likes to use scare tactics to get their way.
They want the American people to believe the world will end and the Treasury will default if their bloated budget full of freebies doesn’t get approved.
They use made up words like “fiscal cliff” and “debt ceiling” that 99% of the public does not understand.
This is not an attack on one political party or the other.
Both sides of the aisle are guilty of these dirty tactics.
The Biden administration is spending money like a college freshman with a new credit card.
But Trump was no better.
In fact, the federal government spends more than it brings in every year.
It is a recipe for disaster.
To shed light on the absolute insanity of how legislators spend your hard-earned tax dollars, let’s look at the proposed 2022 federal budget.
The magnitude of these numbers can be overwhelming.
So, allow me to simplify things…
Let’s take away eight zeroes and pretend this was a household family budget.
Can you imagine showing these numbers to a financial advisor?
Imagine spending 44% more than you made last year then demanding American Express raise the limit on your maxed-out credit card to cover the shortfall.
They would laugh in your face.
The only thing saving the federal government is its magic 1% “credit card.”
The US will pay $305 billion in interest on $26.2 trillion in debt – an effective interest rate of just 1.1%.
Without historic low rates and world reserve currency status, Uncle Sam would be out on the street… cup in hand.
Warren Buffett offered a solution… In a 2011 interview on CNBC, he said:
“I could end the deficit in five minutes. Just pass a law that any time there’s a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.”
Buffett was joking.
But I think it’s a good idea.
Unfortunately, it will never happen. Because the same clowns who draft these wasteful budgets are the same ones who would need to pass the law.
And if you don’t think they’re wasteful, allow me to offer some highlights…
The U.S. Agency for Internal Development spent $11,441,758 to promote green buildings and developments in Vietnam.
The State Department bought an $84,375 statue from Bob Dylan for the embassy in Mozambique.
The National Institutes of Health (NIH) is spending $708,466 on research in London that involves hooking zebrafish on nicotine.
This is the same government agency that spent $1,454,217 to study the prevalence of club-drug use in New York City nightclubs.
(These are real. I’m not making them up.)
The U.S. Army Corps of Engineers spent $3,100,000 on an Afghan National Police women’s compound that has no electricity and has never been used.
And the U.S. State Department is spending $3,250,000 to send 80-150 Russian students to American community colleges for a gap year.
For comparison, this money could cover the cost of an associate’s degree for 338 Americans.
If politicians want to waste their own money, they are free to do so.
But I wish they would quit throwing away ours.
Maybe someday Congress will tighten the reins.
Until then, I will try to forget that my tax dollars went toward the $874,503 used to study how cocaine enhances the sex drive of Japanese quail.
But for now, it is what it is.
I’ll keep working on new trades that for me as well as for you will result in more tax revenue for Uncle Sam thanks to capital gains taxes.