Over the past couple of years, we’ve seen government spending drop considerably as a percentage of the economy as a whole. But is it set for a comeback?

One way to get ahead of trends, in my opinion, is to take basic assumptions that everyone just knows are true and think about what the world would be like if, in fact, those assumptions turned out to be wrong. 

Since returning from the Goldman Sachs conference yesterday, I’ve been thinking about what was said there—as well as what wasn't so much said as assumed.

Looking at the data over the past few days, it’s apparent that the economy continues to improve. Consumer comfort is rising, initial jobless claims are up a bit but remain at extremely low levels, job openings are at multiyear highs . . . the list goes on and on.

This week’s market melt-up has been widely attributed to the release of the Federal Reserve’s meeting minutes. More or less, the Fed said it was worried about global growth and would probably be slower in raising rates than many had expected.

The effect on the market was substantial, which prompts a number of questions. But the one I want to talk about this morning is why the Fed is so worried.

One of the joys of my job is that I’m constantly learning new things. A great way to do this is to go to a conference, listen to smart people speak, and then sit down and chat with them. That’s what I’m doing right now at Commonwealth’s National Conference.

A major concern of the baby boomer-dominated media, as well as the economics profession and government agencies (also dominated by boomers), has been the fate of—you guessed it—older workers, mostly boomers. How many of them are out of work and disabled, or able and willing to return to the workforce? Good questions, but hardly the only issues out there.

While I’m certainly worried about the aging boomers, my own position—right in the middle, in Gen X—makes me more concerned about the job prospects of the younger generation, who will be paying for my retirement (hopefully).

One of the things holding back the economic recovery recently has been slower-than-expected consumer spending growth. Apparently, consumer spending has been constrained by Americans’ newfound unwillingness to borrow.

I suspect, however, that this is an illusion created by a deeper problem. Consumers have the money—in fact, net worth has recovered to an all-time high—they just aren’t borrowing and spending.

I am headed to New York today to speak at a conference on liquid alternatives. These types of alternative investments are often thought of as hedge funds for the masses; the idea is to take hedge fund-like strategies and wrap them in mutual funds. Ideally, this makes the expertise and money-making capabilities of all those hedge fund wizards available to mom and dad, so we can all get rich.

My dad is a pretty level-headed guy, not prone to panic or take things too seriously, so when he forwards me an article asking whether it’s plausible, I take a look.

As I mentioned yesterday, when we compare the actual data with what the doomsayers predicted several years ago, they were just plain wrong. Nonetheless, they continue to try to sell their products by scaring people.

The article my dad just passed along—which suggests that the Federal Reserve is actually bankrupt—is a good example of this type of scaremongering. Posted on a site called Money Morning, it takes some facts, adds some possibilities, mixes in a good dose of “coulds” and “maybes,” and comes up with a set of implications designed to frighten people into buying whatever the doomsayers are selling.

Over the past couple of years, various predictions of doom have been making the rounds.

The dollar, if you remember, was going to collapse. Ditto the housing market. The U.S. economy was going to go into cardiac arrest as it overdosed on Fed stimulus. Employment was never going to come back. I could go on, but you get the idea.

So, how accurate have these scary predictions been? As it turns out, we didn’t have much to worry about.