Entitlement Spending and Business Investment

The light of deep regret
Let me see what I don't get
--Hipsway

Nice graph showing negative relationship between entitlement spending and business investment. Over the last 50 yrs, mandatory entitlement spending as a % of GDP has nearly tripled, while net fixed business investment has dropped by more than 50%.

More recently, note the near 50% increase in entitlement spending under the current administration while business investment has hit record lows below 1% of GDP.  Given the recent trends, those forward estimates do not appear realistic either...

The negative relationship is characteristic of socialistic policy. Resources for leveling programs such as entitlements come from personal incomes.  Income that goes toward entitlements means less income for savings. Less savings means less capital that can be allocated toward investment.

Stated differently, entitlement spending crowds out capital formation. The result is capital consumption. Without capital, projects to improve productivity do not get done. Without improvements in productivity, standard of living falls.