Government Spending with Fexingo: Budget, Deficits, and Public Finance Explained

Episode 80 of Government Spending with Fexingo: Budget, Deficits, and Public Finance Explained. Lucas and Luna examine how government grants—especially in R&D and social services—create dependency loops that persist long after the original problem is solved. Using the Small Business Innovation Research (SBIR) program and community development block grants as case studies, they discuss why grant-fu...

Episode 79 of Government Spending with Fexingo digs into a quiet time bomb: the investment return assumptions that public pension funds use to calculate their liabilities. Lucas and Luna walk through the history of how these assumptions drifted from reasonable to optimistic, focusing on CalPERS — the California Public Employees' Retirement System, which assumed 7.5 percent annual returns for years...

Episode 78 of Government Spending with Fexingo explores why public pension funds are pouring billions into private equity, even as returns get harder to predict. Lucas and Luna break down the California Public Employees' Retirement System (CalPERS) target of 13 percent from private equity, the liquidity mismatch, and the hidden fees eating into returns. They discuss the J-curve effect, the challen...

Episode 77 of Government Spending with Fexingo unpacks a paradox: as government bond yields rise, future economic growth gets squeezed. Lucas and Luna walk through the mechanics of how higher interest payments crowd out productive investment, using Japan's 1990s debt spiral and the US Congressional Budget Office's latest long-term projections as anchors. They explain the 'interest-to-GDP ratio' —...

Episode 76 of Government Spending with Fexingo digs into the persistent pay gap between public and private sector workers. Lucas and Luna anchor on a specific number: the roughly 20 percent pay penalty for federal employees in professional roles, using data from the Congressional Budget Office’s 2024 report. They explore why this gap exists — from wage compression to political constraints — and wh...

Every year, governments sell everything from broadcast spectrum to drilling rights at auction — and systematically leave billions of dollars on the table. In this episode, Lucas and Luna examine why public auction design so often misfires, drawing on the disastrous 2021 UK 5G spectrum auction, where a poorly chosen format cost the Treasury an estimated £1 billion. They break down the mechanics of...

In this episode of Government Spending with Fexingo, Lucas and Luna explore a striking inefficiency in public procurement: why different US government agencies pay wildly different prices for the same prescription drugs. Lucas walks through a 2024 GAO report showing that the Department of Veterans Affairs pays an average of $1.50 per unit for a common anti-inflammatory, while the Defense Departmen...

Every year, U.S. federal agencies overpay employees by an estimated $4.5 billion — and a lot of those payments go to people who no longer work there. Lucas and Luna break down how outdated payroll systems, fragmented data, and weak reconciliation processes create a perfect storm for improper payments. They trace one real case: a retired Navy officer who kept receiving paychecks for 18 months after...

Starting a business in the US takes 94 days and costs 0.5% of income per capita on average. In New Zealand, it takes half a day and costs 0.1%. Why the gap? We look at how government licensing, zoning, and tax registration create friction that disproportionately hurts small entrepreneurs. Lucas and Luna dig into the World Bank's Doing Business data (before it was suspended), the specific steps tha...

Episode 71 of Government Spending with Fexingo explores why governments consistently lose money on land banking—buying and holding land for future development. Lucas and Luna examine the case of the UK's Homes and Communities Agency, which sold a massive land portfolio at a loss, and contrast it with Singapore's successful use of land value capture through its Urban Redevelopment Authority. They b...

Episode 70 of Government Spending with Fexingo: Budget, Deficits, and Public Finance Explained dives into the little-known problem of substitution bias in government price indexes. Lucas and Luna unpack how the Consumer Price Index overstates inflation by ignoring how consumers switch to cheaper alternatives when prices rise. Using the Boskin Commission's 1996 finding that the CPI overstates infla...

In this episode of Government Spending with Fexingo, Lucas and Luna explore why government agencies consistently pay higher prices than private companies for the same goods and services. Using the example of office chairs purchased by the U.S. General Services Administration — often costing 2 to 3 times more than comparable models on the open market — they unpack the structural reasons behind gove...

Episode 68 of Government Spending with Fexingo takes a hard look at why large-scale government IT modernization projects so frequently fail. Lucas and Luna dig into the story of the UK's National Programme for IT in the National Health Service — a £12.4 billion project abandoned in 2011 — and compare it to the US Department of Veterans Affairs' $16 billion electronic health records overhaul curren...

As of mid-2026, the US federal government is spending more on net interest than on either Medicare or national defense. Lucas breaks down the mechanics of how rising debt levels and higher interest rates compound into a faster-growing expense line, using the analogy of a credit card balance that keeps getting bigger while the APR rises. Luna asks why this isn't getting more political attention, an...

When a crisis hits, governments rush through emergency spending bills with bipartisan urgency. But after the crisis fades, that spending almost never fully disappears. In this episode, Lucas and Luna examine the 'ratchet effect' in US federal budgeting — how temporary programs like the 2008 TARP bailout, the 2020 CARES Act, and the 2021 infrastructure bill created permanent fiscal footprints despi...

Lucas and Luna dig into why buying a simple thing like office furniture costs the federal government 40% more than a private company. They walk through the 5,000-page Federal Acquisition Regulation, the burden of requirements like the Buy American Act and Davis-Bacon wage rules, and how risk aversion leads to sole-source contracts that drive up prices. They cite a 2024 Government Accountability Of...

When a government buys a building with debt, the liability shows up on the books. But when it signs a 30-year lease with the same net present value? That obligation often stays invisible. In this episode of Government Spending with Fexingo, Lucas and Luna dig into the arcane world of government lease accounting — specifically the difference between an 'operating lease' and a 'capital lease' — and...

In this episode of Government Spending with Fexingo, Lucas and Luna dive into the world of unfunded mandates — when the federal government requires states or local governments to implement policies but provides little or no funding to do so. Using the 2001 No Child Left Behind Act as a central case study, they explore why these mandates have become a recurring tool in Washington, despite widesprea...

Episode 62 of Government Spending with Fexingo explores the growing trend of governments acting as direct insurers — not just in flood or crop insurance, but increasingly in areas like cyber risk and pandemic business interruption. Lucas and Luna break down the US National Flood Insurance Program's $20 billion debt, the UK's pandemic business interruption guarantee scheme, and the tricky economics...

Episode 61 of Government Spending with Fexingo: Budget, Deficits, and Public Finance Explained. Lucas and Luna dive into the world of explicit and implicit government guarantees—from FDIC insurance to Fannie Mae and beyond. Using the 2023 Silicon Valley Bank failure and the 2008 housing crisis as anchors, they explain how contingent liabilities can balloon into trillion-dollar obligations without...

In Episode 60 of Government Spending with Fexingo, Lucas and Luna drill into a quiet crisis in the $28 trillion US Treasury market — declining liquidity. They unpack how post-2008 regulations, the rise of high-frequency trading, and the US government's own massive debt issuance have made it harder to buy and sell bonds without moving prices. Lucas explains the 'bid-ask spread creep' and what the B...

Lucas and Luna break down why governments pay vastly more for software licensing than buying outright. Using the US Department of Defense's $45 million spend on Microsoft Office licenses in 2025 as a case study, they explore how procurement rules, budget cycles, and vendor lock-in inflate costs. The episode reveals that the DoD's per-seat cost for Office 365 was nearly triple the commercial rate,...

Governments around the world routinely approve projects that end up costing far more than initial estimates. In this episode, Lucas and Luna explore the psychology and politics behind cost overruns, focusing on a 2024 study of 200 major infrastructure projects across OECD countries. They discuss how optimism bias, strategic misrepresentation, and the 'sunk cost' fallacy combine to create a cycle o...

Episode 57 of Government Spending with Fexingo digs into the systematic bias in government cost projections. Hosts Lucas and Luna examine the 'optimism bias' that causes public projects from highways to IT systems to run billions over budget. They walk through a classic example: the Sydney Opera House, originally estimated at $7 million AUD in 1957 and completed at $102 million — a fourteen-fold o...

In this episode of Government Spending with Fexingo, Lucas and Luna dissect the economics behind public subsidies for professional sports stadiums. They explore why cities continue to spend hundreds of millions on venues for private teams despite decades of academic research showing negligible economic returns. Using the 2024 Kansas City Chiefs and Royals stadium deal as a case study, they break d...