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In this episode of Government Spending with Fexingo, Lucas and Luna explore how inflation can silently reduce the real value of government debt. They focus on the aftermath of World War II, when the US national debt hit 106% of GDP, and how a combination of moderate inflation, financial repression, and economic growth brought it down to just 33% by 1970. Lucas explains the mechanics of nominal versus real debt, the role of interest rate caps, and why the same playbook might not work today. Luna challenges the fairness of an 'inflation tax' and asks whether modern central bank independence makes this strategy obsolete. A concrete historical case with clear lessons for today's fiscal debates.
#Inflation #GovernmentDebt #WorldWarII #FederalReserve #FiscalPolicy #RealDebt #FinancialRepression #EconomicHistory #USDebt #GDPRatio #MonetaryPolicy #InflationTax #CentralBankIndependence #Economics #PublicFinance #FexingoBusiness #BusinessPodcast #Budget
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Lucas and Luna explore the hidden costs of government subsidies, using the US solar panel tariff suspension as a case study. They discuss how subsidies can distort markets, create unintended consequences, and sometimes cost more than they deliver. Lucas breaks down the concept of deadweight loss from subsidies and explains why even well-intentioned programs can backfire. The episode also touches on subsidy transparency and the challenge of measuring true cost to taxpayers.
#GovernmentSubsidies #Economics #SolarTariffs #SubsidyCost #DeadweightLoss #MarketDistortion #Taxpayer #RenewableEnergy #Policy #BusinessEconomics #FexingoBusiness #BusinessPodcast #PublicFinance #Budget #Incentives #Solar #TradePolicy #Efficiency
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Credit ratings for sovereign governments—like S&P's AAA or Moody's Baa2—shape how much countries pay to borrow and whether investors buy their bonds. In this episode, Lucas and Luna walk through the mechanics of a sovereign credit rating: what agencies actually evaluate, the difference between a rating and a rating outlook, and how a downgrade can ripple through a country's entire economy. They use a concrete recent case—the 2023 US credit rating downgrade by Fitch—to illustrate why a AAA matters even for the world's largest economy, and why investors didn't panic the way textbooks predict. The episode also touches on the role of credit ratings in pension fund mandates and the 'cliff effect' when a rating falls below investment grade. No math, no jargon—just a clear map of a mechanism that quietly governs trillions in government borrowing.
#CreditRating #SovereignDebt #Moodys #SPGlobal #FitchRatings #USDebt #AAA #InvestmentGrade #JunkBond #BondMarket #GovernmentBonds #Treasury #FiscalPolicy #Economics #FexingoBusiness #BusinessPodcast #PublicFinance #DebtDynamics
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Episode 7 of Government Spending with Fexingo digs into a $1.5 trillion timebomb that most Americans don't know about: state and local government pension underfunding. Lucas and Luna walk through the specific case of Illinois, where the state's pension system is only 40% funded, and explain why this matters for both public employees and taxpayers. They break down how pension accounting works, why public plans can assume a 7% return when private plans cannot, and what happens when those assumptions fail. With examples from Chicago's school closures to Kentucky's recent reforms, this episode shows how deferred compensation creates hidden debt that doesn't show up on official budget documents. The hosts also explore whether the federal government might eventually step in to bail out the worst-off states. A focused, numbers-driven look at a slow-moving fiscal crisis that affects every taxpayer.
#GovernmentPensions #PublicPensionCrisis #IllinoisDebt #StateAndLocalFinance #PensionUnderfunding #UnfundedLiabilities #IllinoisPensions #PublicEmployeeBenefits #GASB #FiscalPolicy #StateBudgets #TaxpayerBurden #KentuckyPensionReform #CalPERS #MunicipalBonds #RetirementSecurity #FexingoBusiness #BusinessPodcast
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In this episode of Government Spending with Fexingo, Lucas and Luna tackle the controversial case for perpetual zero-interest government borrowing. Drawing on Japan's experience with decades of near-zero rates and the U.S. Treasury's 2020 shift to all-coupon debt, they explore how low-rate environments have changed the cost of public debt. Lucas explains the concept of 'debt service as a fiscal headroom variable' and how the U.S. saved over $200 billion in interest in 2021 alone. They discuss the limits of this strategy—what happens when inflation returns or term premiums spike—and whether modern monetary theory's critics have been too quick to dismiss a practical observation: that structurally low rates can make government debt essentially free. A sharp, data-driven look at one of the most quietly radical changes in public finance.
#GovernmentDebt #ZeroInterestRates #Japan #USTreasury #DebtService #FiscalPolicy #ModernMonetaryTheory #Inflation #TermPremium #PublicFinance #Economics #Budget #FexingoBusiness #BusinessPodcast #EconomicsPodcast #GovernmentSpendingPodcast #LucasAndLuna #FiscalHeadroom
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The US federal government is the single largest borrower on Earth, but most people have never heard of a Treasury auction. In this episode, Lucas and Luna break down how the Treasury borrows nearly all its money through a weekly auction system that is both shockingly efficient and surprisingly opaque. They walk through the mechanics of competitive versus non-competitive bids, the role of primary dealers, and what happens when an auction goes poorly — like the October 2024 mini-revolt in the 30-year bond market. Lucas argues the auction process is a quiet pillar of financial stability; Luna pushes back on whether it's too reliant on a small club of banks. Specific numbers and dates anchor every claim. No hype, just how the world's most important debt market actually works.
#TreasuryAuctions #GovernmentDebt #PublicFinance #BondMarket #PrimaryDealers #USTreasury #FiscalPolicy #EconomicsExplained #LucasAndLuna #FexingoBusiness #BusinessPodcast #FinancePodcast #PodcastEpisode #DebtManagement #AuctionMechanics #NonCompetitiveBidding #BenchmarkBonds #FinancialInfrastructure
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In this episode, Lucas and Luna explore the controversial idea that government debt is not inherently bad — it's about what you borrow for. They drill into the concept of 'public investment' versus 'consumption spending' using the concrete example of the U.S. Interstate Highway System, built with debt in the 1950s, which generated decades of economic growth. They also discuss how modern economists like Stephanie Kelton frame deficits as a policy tool, not a moral failing. But they don't let governments off the hook: they examine why Japan's debt-to-GDP ratio of 260 percent hasn't caused a crisis, while Greece's 180 percent did. The episode ends with a practical lens: how to evaluate a government's borrowing the way an investor evaluates a company's debt. Specific, data-driven, and thought-provoking.
#GovernmentDebt #PublicInvestment #DeficitSpending #InterstateHighwaySystem #StephanieKelton #ModernMonetaryTheory #JapanDebt #GreeceCrisis #DebtToGDP #Infrastructure #ProductiveDebt #ConsumptionSpending #FiscalPolicy #Economics #GovernmentSpending #FexingoBusiness #BusinessPodcast #PublicFinance
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In this episode, Lucas and Luna break down the mechanics of municipal bonds — the $4 trillion market that funds schools, highways, and hospitals across America. They explain the tax-exempt structure, why muni yields have historically tracked Treasury yields, and how the post-2024 interest rate environment has changed the calculus for individual investors. Lucas walks through a concrete example: a 30-year general obligation bond from a mid-sized city issued in 2020 versus a new issue in May 2026, showing how yield pickup works. Luna pushes back on the common assumption that munis are always a safe bet, raising the 2013 Detroit bankruptcy and what it meant for bondholders. The episode also covers the difference between general obligation and revenue bonds, the role of municipal bond insurers, and the impact of the 2017 Tax Cuts and Jobs Act on advance refunding. A focused, numbers-driven look at a corner of the debt market most people encounter only through their property taxes.
#MunicipalBonds #MuniMarket #TaxExempt #PublicFinance #Infrastructure #GeneralObligation #RevenueBonds #DetroitBankruptcy #BondInsurance #YieldCurve #InterestRates #FiscalPolicy #InvestmentStrategy #Economics #GovernmentSpendingWithFexingo #FexingoBusiness #BusinessPodcast #BudgetAndDeficits
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Episode 2 of Government Spending with Fexingo digs into the mechanics of the federal budget baseline — the CBO's 'current law' vs 'current policy' projections. Lucas and Luna explain why the baseline almost always assumes spending will grow, and how that shapes every debate about deficits, taxes, and entitlement reform. They walk through the 2026 Congressional Budget Office baseline released in January, the role of the 'baseline magic' in making tax cuts look like they cost trillions, and why Social Security's trust fund exhaustion date keeps moving. You'll learn one concrete number: the difference between the 10-year deficit under current law vs current policy is roughly $4 trillion. A must-listen for anyone who wants to understand why Washington never seems to cut spending — and what that means for your portfolio.
#FederalBudget #CBO #BaselineProjections #CurrentLaw #CurrentPolicy #FiscalPolicy #TaxCuts #SocialSecurity #Deficit #EntitlementSpending #GovernmentSpending #Economics #BudgetProcess #FOMC #FiscalResponsibility #FexingoBusiness #BusinessPodcast #Debt
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In the debut episode of Government Spending, Lucas and Luna zoom in on one staggering number: global government debt has surpassed $70 trillion for the first time. They trace how we got here — from the 2008 financial crisis to pandemic-era stimulus — and what it means for interest payments, future budgets, and everyday taxpayers. Lucas breaks down the math behind the debt-to-GDP ratio using Japan as a cautionary tale, while Luna challenges the conventional wisdom that all debt is bad, pointing to productive infrastructure spending. They debate whether the real risk is high debt levels or slow economic growth, and preview the tough choices ahead for finance ministers worldwide. No abstract theory — just the concrete trade-offs that define modern public finance.
#GlobalDebt #GovernmentDebt #SeventyTrillion #DeficitSpending #FiscalPolicy #PublicFinance #DebtToGDP #JapanEconomy #InterestRates #CentralBanks #Infrastructure #Stimulus #Economics #BudgetDeficit #SovereignDebt #FexingoBusiness #BusinessPodcast #GovernmentSpendingShow
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