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Small business optimism index, record budget surplus, commodities

Summary:
This is the automatic fiscal stabilizers doing their thing to slow things down during a recovery, and they keep increasing the pressure until growth goes negative. Additionally, with some trillion of public debt, an 8% increase in prices means the value of the public debt- the net money supply in the economy- has contracted by about .4 trillion. This is a direct ‘removal of savings’ and functions the same as a tax on savings, thereby slowing the economy. It is reflected in the debt/GDP ratio which is falling rapidly. This is how a typical post war slump develops- high wartime deficit spending followed by a reduction in deficit spending. The US posted a budget surplus of USD 308 billion in April of 2022, the highest on record, switching from a USD 226

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Small business optimism index, record budget surplus, commodities
This is the automatic fiscal stabilizers doing their thing to slow things down during a recovery, and they keep increasing the pressure until growth goes negative. Additionally, with some $30 trillion of public debt, an 8% increase in prices means the value of the public debt- the net money supply in the economy- has contracted by about $2.4 trillion. This is a direct ‘removal of savings’ and functions the same as a tax on savings, thereby slowing the economy. It is reflected in the debt/GDP ratio which is falling rapidly.
This is how a typical post war slump develops- high wartime deficit spending followed by a reduction in deficit spending.

The US posted a budget surplus of USD 308 billion in April of 2022, the highest on record, switching from a USD 226 billion gap in the same period last year and above market expectations of a USD 226 billion surplus. April has traditionally been a budget surplus month due to the traditional April 15 tax filing deadline, except in 2009, 2010 and 2011 after a financial crisis, and in 2020 and 2021 due to the Covid-19 pandemic. Receipts jumped 97 percent to an all-time high of USD 864 billion, underpinned by tax receipts on the back of a strong economic recovery. At the same time, outlays slumped 16 percent to USD 555 billion, reflecting lower spending for COVID-19 relief. For the first seven months of the 2022 fiscal year, the US federal deficit was at USD 360 billion, a 81 percent decline from the same period of fiscal 2021. source: Financial Management Service, US Treasury Monthly Treasury Statement

Small business optimism index, record budget surplus, commodities
State and local governments are also getting flooded with tax payments:
Small business optimism index, record budget surplus, commodities
Here’s the culprit:
Small business optimism index, record budget surplus, commodities
Hopefully they level off, but if energy takes another run up the inflation numbers won’t turn down:
WARREN MOSLER
Warren Mosler is an American economist and theorist, and one of the leading voices in the field of Modern Monetary Theory (MMT). Presently, Warren resides on St. Croix, in the US Virgin Islands, where he owns and operates Valance Co., Inc.

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