Spend, Save, Borrow?

Tuesdays with Trump, not to be confused with Tuesdays with Morrie….

Over at Philstockworld… High Finance for Real People – Fun and Profits…

Phil Davis – “Debts should be paid down by cutting back expenses, not at the expense of savings unless the debt is CC debt, in which case it should be paid off ”

Phil’s advice is sage for capital preservation. Wondering how many people are following that MO, I charted Yoy quarterly growth in personal consumption expenditures vs personal saving vs total revolving credit Jan 2014 through Nov 2016.

PCE spending growth up 3 to 4%; savings growth down 16 to -4%; CC debt growth up 1 to 6%. As one can witness below, reversing the hopeful trend of late 2015 by spending more, while saving less and borrowing more on CC.

What does this have to do with our Tuesdays with Trump you Natter? It appears government hiring to encourage spending is being frozen.

President Trump on Monday issued an executive order implementing a hiring freeze across the federal government, with exceptions only for military, national security or public safety personnel. Statistics from the Office of Personnel Management, though, show that the number of executive branch employees hasn’t been this low since 1965, and that the number of employees has stayed more or less steady in the last 15 years. – FOX NEWS – “FAIR AND BALANCED?”

Collateral damage?? Veterans make up 31% of the federal workforce and could be disproportionately affected by the move because they receive a hiring preference when it comes to federal jobs. Does it get any better? Just your Federal government office turnaround and service levels…

Richard G. Thissen, president of the National Active and Retired Federal Employees Association, noted that the federal workforce is now roughly 10 percent smaller than it was in 1967. Thissen said the freeze “would undermine the efficiency of government operations by creating hiring backlogs and inadequate staffing levels, and it is unlikely to save any money.” – The Washington Post – “A LIBERAL FISH WRAP?”

When will the freeze thaw? Trump instructed the head of OPM to “recommend a long-term plan to reduce the size of the Federal Government’s workforce through attrition” within 90 days, at which point the hiring freeze would expire. All in a first day’s work.