The DC Today - Wednesday, March 1, 2023

Episode 569: The DC Today - Wednesday, March 1, 2023

Greetings from New York City, where the snow went away before I arrived and where day one of the month of March was pretty boring.

Show notes

Blog post here:

ASK DAVID “In your recent random walk in the Dividend Cafe you mentioned ‘full expensing of all capital expenditures’ as part of your prescription for avoiding Japanification. Will you please explain why this is necessary and what impact it will have?”

~ Luke L.

I think one of the major tenets of Japanification is “low/slow/no growth,” and therefore, an obvious antidote (tautologically) is “growth.” I think the testimony of history is a clear and particularly recent experience that in a period of low capital expenditures, which are needed to improve productivity, which is needed to generate growth, removing disincentives to such productive investment is key. Forcing businesses to make large (and risky) investments NOW, but only to deduct that expense over time, is a disincentive. Immediate cash expensing incentivizes capex, which drives productivity, which drives growth.

Links mentioned in this episode:


David Bahnsen

David Bahnsen

David is the Founder, Managing Partner, and the Chief Investment Officer of The Bahnsen Group.

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