An economic thought experiment?

In the U.S., consumer spending is responsible for 67% of economic output, investment 18%, government spending 17% and we have a trade deficit of 3%. This has not always been the case.

In the Leave it to Beaver 50s, when America was supposedly great, government spending averaged over 22%, consumption accounted for around 61% and  and we ran a small trade surplus. Investment was marginally smaller than today.

If government spending shrinks further as a percentage of GDP and the trade deficit shrinks and consumer goods become more expensive, does investment have to increase? If Stagflation re-emerges, what does that mean for “Real” consumer spending? For our consumer-oriented clients, these are important questions to ask.