Whenever stock buybacks make headlines, you often hear about how their value has been trending higher and setting record highs.

So, it’s easy to jump to the conclusion that corporations are increasingly shifting their capital spending priorities1 toward buying back stock, which is generally considered less productive for the economy than spending toward capital expenditures and other growth projects.

This is one of the reasons buybacks are a hot-button issue in politics.

I’m not going to get into the pros and cons of buybacks here. But I do think it’s worth putting the scale of buybacks in the context of the greater stock market and its impact on earnings.