The decline in public investment.

Matias Vernengo has drawn attention to this chart, which shows the decline in public investment in the US since WWII. Well done Matias.

I’m not in favour of big INCREASES in public investment in a recession for reasons spelled out here. But to REDUCE such spending is plain bonkers. The red line is gross public investment in the US and the blue is the net figure.

Matias says the average post WWII spend on gross public investment has been 5% of GDP, but is now down to 3.6%.