September 2024 Newsletter: Why Nothing Stops This Fiscal Train
"Ben Hunt’s canonical essay “Snip!” from 2019 is one of my favorite short reads of all time. It’s a prescient look at the seismic shifts that will occur as the cord that once connected taxes and spending is cut. Read the piece later, but for now just know that it outlines the enormous real and psychological impact of renouncing the most important... See more
Unanchored - Epsilon Theory
The two-speed economy is likely to remain in effect. High interest rates (even after some cuts), Medicaid cuts, and other things continue to put downward pressure on lower-income and younger consumers on average. Meanwhile, fiscal spending continues to be aimed at older Americans on average, and wealthy Americans and institutions have generally
... See moreLyn Alden • August 2025 Newsletter: Tighter Fiscal, Looser Monetary
Relatedly, when fiscal deficits as a share of GDP are rising during a period of falling unemployment over a sustained period of time, that is another sign of fiscal dominance. This type of breakdown in correlation has occurred rarely within the past 70 years:
Lyn Alden • July 2024 Newsletter: Rates Insensitivity in the Downcycle
... See moreCongress can manipulate baselines, set fake expiration dates, and ignore their own budget rules—but they can't repeal the laws of economics or math. Deficits will continue to rise—from $1.8 trillion today to a projected $3.6 trillion in a decade. Another $25 trillion in 10-year borrowing will push interest rates higher and bury the budget under