Friday Haymaker
Friday Haymaker
Muir on Government Deficits
Hello, Subscribers:
Friend of Haymaker (FOH) Kevin Muir — The MacroTourist — is taking on one of our favorite subjects in a piece which we’ve excerpted below for your reading pleasure. In fact, it’s one of our least favorite subjects, as its consequences are pretty damn bad for economies on both sides of the U.S. / Canada divide. The subject is government accounting, or the absence ofaccurate government accounting, to be more precise.
Summarizing the major theme: governments are not accountable to, um, accountants in the way that private businesses are. In republics, democracies, constitutional monarchies, and whatever version of all that Canada is, governments are accountable to voters. Some of those voters like good governance, responsible investment in generational infrastructure, wildlife protections, land preserves, responsible resource management, and reasonable regulations for things like food safety and manufacturing quality.
Other voters like cash in hand, no matter the long-term consequences.
Because governments can digitally conjure money, employ craptastic accounting to their balance sheets, and “stimulate” the economy with cash that exists quite separately from objective productivity, they often do those very things with predictable results.
The fact is that the further a government divorces its fiscal policies from tangible economic output (measured by GDP or otherwise), the more likely it is that those policies will create distortions in the markets and corrupt the popular understanding of a government’s actual role in managing the economy.
Governments often fail at economic management, especially when that last word has a “micro” in front of it, as it so often does. (The Fed is the ultimate perp in that regard.) However, governments should play an essential role in making, or at least encouraging, investments in critical infrastructure. When building a bridge with a lifespan of 100 years, or more, is treated the same as an entitlement outlay — i.e., immediately expensed versus depreciated over its useful life — politicians forfeit a key incentive to make increasingly needed investments that generate societal benefits for generations to come.
We’ll let Kevin take it from here. Be sure to check out his Substack page if you haven’t already done so.
The Haymaker Team
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IMPORTANT DISCLOSURES
This material has been distributed solely for informational and educational purposes only and is not a solicitation or an offer to buy any security or to participate in any trading strategy. All material presented is compiled from sources believed to be reliable, but accuracy, adequacy, or completeness cannot be guaranteed, and David Hay makes no representation as to its accuracy, adequacy, or completeness.
The information herein is based on David Hay’s beliefs, as well as certain assumptions regarding future events based on information available to David Hay on a formal and informal basis as of the date of this publication. The material may include projections or other forward-looking statements regarding future events, targets or expectations. Past performance is no guarantee of future results. There is no guarantee that any opinions, forecasts, projections, risk assumptions, or commentary discussed herein will be realized or that an investment strategy will be successful. Actual experience may not reflect all of these opinions, forecasts, projections, risk assumptions, or commentary.
David Hay shall have no responsibility for: (i) determining that any opinion, forecast, projection, risk assumption, or commentary discussed herein is suitable for any particular reader; (ii) monitoring whether any opinion, forecast, projection, risk assumption, or commentary discussed herein continues to be suitable for any reader; or (iii) tailoring any opinion, forecast, projection, risk assumption, or commentary discussed herein to any particular reader’s investment objectives, guidelines, or restrictions.
David Hay is a passive owner of Evergreen Gavekal (“Evergreen”), a registered investment adviser with the Securities and Exchange Commission. As of 03/31/2025 Mr. Hay has no involvement in the day to day operations of Evergreen, nor is he involved with any investment research, or investment management performed by Evergreen. The information herein reflects the personal views of David Hay as a seasoned investor in the financial markets and any recommendations noted may be materially different than the investment strategies that Evergreen manages on behalf of, or recommends to, its clients.
Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this material, will be profitable, equal any corresponding indicated performance level(s), or be suitable for your portfolio. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on an individual’s investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Investors should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.
David “The Haymaker” Hay
IMPORTANT DISCLOSURES
This material has been distributed solely for informational and educational purposes only and is not a solicitation or an offer to buy any security or to participate in any trading strategy. All material presented is compiled from sources believed to be reliable, but accuracy, adequacy, or completeness cannot be guaranteed, and David Hay makes no representation as to its accuracy, adequacy, or completeness.
The information herein is based on David Hay’s beliefs, as well as certain assumptions regarding future events based on information available to David Hay on a formal and informal basis as of the date of this publication. The material may include projections or other forward-looking statements regarding future events, targets or expectations. Past performance is no guarantee of future results. There is no guarantee that any opinions, forecasts, projections, risk assumptions, or commentary discussed herein will be realized or that an investment strategy will be successful. Actual experience may not reflect all of these opinions, forecasts, projections, risk assumptions, or commentary.
David Hay shall have no responsibility for: (i) determining that any opinion, forecast, projection, risk assumption, or commentary discussed herein is suitable for any particular reader; (ii) monitoring whether any opinion, forecast, projection, risk assumption, or commentary discussed herein continues to be suitable for any reader; or (iii) tailoring any opinion, forecast, projection, risk assumption, or commentary discussed herein to any particular reader’s investment objectives, guidelines, or restrictions.
David Hay is a passive owner of Evergreen Gavekal (“Evergreen”), a registered investment adviser with the Securities and Exchange Commission. As of 03/31/2025 Mr. Hay has no involvement in the day to day operations of Evergreen, nor is he involved with any investment research, or investment management performed by Evergreen. The information herein reflects the personal views of David Hay as a seasoned investor in the financial markets and any recommendations noted may be materially different than the investment strategies that Evergreen manages on behalf of, or recommends to, its clients.
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