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With the deficit in the trillions, and the govt laying awake at nights figuring out how to giveaway more money, has anyone (other than me) noticed a shortage of available money for contract renewals?  For the first time in awhile, the U S Dollar is tanking against other currencies, and printing money is assured to create more inflation.

Am I the only one who has noticed this?

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13 hours ago, Corduroy Frog said:

With the deficit in the trillions, and the govt laying awake at nights figuring out how to giveaway more money, has anyone (other than me) noticed a shortage of available money for contract renewals?  For the first time in awhile, the U S Dollar is tanking against other currencies, and printing money is assured to create more inflation.

Am I the only one who has noticed this?

With respect, I don't think you have a strong understanding of macroeconomics or monetary policy. I mean -- forgive me if you have a Master's in Economics -- I feel as if your assertions are just assertions without a strong factual basis or understanding of causality.

For example, the U.S. has had a large deficit for years. It's absolutely true that 2020 was the worst year in a very long time (and maybe ever) from a pure deficit perspective. But the size of the deficient (especially since 2001) has not had a noticeable impact on the Federal government's willingness to spend money. Similarly, the country has experienced inflation in the past (anybody remember "Whip Inflation Now"?) and the Feds were able to spend quite a bit of money during those times. There is even a theory that inflation leads to pressure to keep interest rates low, which stimulates borrowing (and thus the overall economy) -- which in turn leads to higher income to the Federal government (via taxes) that can subsequently be spent.

I'm not saying I'm any kind of expert in this area, but my point is that (respectfully) I don't think you are either. I was taught a long time ago that "fear is the easiest thing to sell" and so my advice is not to take counsel of your fears.

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On 5/10/2021 at 9:53 AM, here_2_help said:

I'm not saying I'm any kind of expert in this area, but my point is that (respectfully) I don't think you are either. I was taught a long time ago that "fear is the easiest thing to sell" and so my advice is not to take counsel of your fears.

Here_2_help I always enjoy your responses.  When Reagan took office in 1980, the deficit was only $46B.  I will agree that in the face of ever-rising deficits, Inflation and Interest Rates have not risen to meet expectations of conventional rationale.  I am certainly not macroeconomic-minded to understand why it doesn't happen. 

But the dollar is tanking against other currencies, and I wonder if the economics of huge deficits respond when "enough is enough". 

Gov't customers are always price-conscious (in spite of claims of "best value"), but I seem to notice this year, money is very tight.

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6 hours ago, Corduroy Frog said:

the dollar is tanking against other currencies, and I wonder if the economics of huge deficits respond when "enough is enough".

Tanking against which currencies?? I checked the Euros, Yen and Yuan exchange rates over the past year and the graphs are very stable with minor changes.

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11 hours ago, Corduroy Frog said:

Gov't customers are always price-conscious (in spite of claims of "best value"), but I seem to notice this year, money is very tight.

If you are a defense contractor, and not one of the Top 20, then it is possible that program budgets are tight. There are a few major programs that are sucking a lot of money from the trough (hello, F-35). The government's priorities are shifting (hello, hypersonics). These circumstances obviously impact other contractors. On the other hand, if you are a cybersecurity contractor or a high-tech innovator, then you should be doing just fine.

I would say that the current environment strikes me as being very much business as usual -- contractors jostling each other for precious program funds. I've not really known it to ever have been any different. And yes, I experienced the Reagan years first-hand. But I admit your clients may have a different view, depending on what they sell and to whom they sell.

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11 hours ago, Corduroy Frog said:

Gov't customers are always price-conscious (in spite of claims of "best value"), but I seem to notice this year, money is very tight.

What does it mean, "I seem to notice..."?

"Seem"? Did you notice or didn't you?

What did you "notice"?

"Tight" by how much? 

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Good grief Vern - are idioms of speech not allowed?

Specifically, two renewals are being parlayed with zero increase (not even escalation), and another is restructured with a little more money but an increased scope of work.

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