An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Saturday, February 23, 2013
February Fiscal Flows Come Roaring Back
After posting a surplus of $20B in December followed by a $33B deficit in January, the government's fiscal injections of $NFA have swung around to recent highs through the 21st of February.
Through February 21st, net withdrawals from the Treasury account total $347B while net deposits are at $163B for a fiscal deficit ex-post result of $184B, again through just the 21st. TTM data reports this deficit flow average at a bit under $90B per month so February is currently tracking towards a recent monthly high delta.
A highlight on the withdrawal side for February is the total for IRS Tax Refunds (Individual) of $76B which is contributing substantially to this months out-sized net withdrawals. This large amount of seasonal $NFA injection more than offsets the system level $NFA removal effects of the 2% payroll tax increase that went into effect January 1st; the effects of which are estimated at a cet par net removal of $10-12B per month.
Perhaps look for a short term increase in retail sales to close out February as any poor January results and early February warnings (such as that heard from Wal-Mart ) related to the recent 2% payroll tax increase may be counter-enabled by this strong seasonal tax refunding form of $NFA injection.
Short term, the system is being supplied with $NFA at an adequate rate to prevent systemic instability and associated systemic liquidation.
Dear Mike:
ReplyDeleteDo you know who Thom Hartmann is? He is a progressive radio talk show host and also host RT's Big Picture. He is one of the good guys and he has just recently discovered MMT. He is not quite ready to commit to the new paradigm understanding MMT creates but he has interviewed a couple of MMTers on his show. As we MMTers are fighting to increase the MMT awareness, we need every ally we can get. To that end, I wrote up a nice primer for him along with the CV's of you, Skelton, Mosler, Hudson, and Wray. I provided him with a bunch of links to interviews you have done on FBN, CNBC, RTCR, imploring him to have you on his show to help explain to and convince him of the realities of MMT. I am nobody, so I don't presume that this email will lead to actions. I just wanted to make you aware of a new potential asset for distributing MMT. He is relatively popular and has a reasonable audience. These are the people we need to start to convince, because the more people that talk about MMT the less crazy it sounds. What do you think?
And one more thing......because people tend to "believe" in their economic philosophies much in the same way people "believe" in their religion. I.E. rejecting evidence contrary to your previously held belief. I am fairly well read in the Atheist community (being one myself) and I had an epiphany the other day that because atheists are comfortable living their lives based on the evidence of reality, they are naturally predisposed to alter previously held beliefs when new information is presented. I think that description fits in perfectly with the type of people who wouldn't just dismiss MMT outright because it doesnt fit their previously held notions of reality. Seems like their might be some room for an alliance their somehow.....what do you think?
Auburn,
ReplyDeleteTell Hartmann to have TWO guests on the topic of MMT... ie NOT ONE BUT TWO...
The visual of an individual guest talking heterodoxy does not carry a strong enough image if the goal is to foment a paradigm change...
ie there is "Strength in numbers"...
rsp,
PS How can an atheist have an epiphany? ;) just kidding!
Matt,
ReplyDeleteWhile the IRS numbers are encouraging, I do believe that the IRS refunds will be used to pay back debt, and not for consumer spending. So more money destruction is in the offing. Just my 2 cents. Particularly if the refunds are going to the middle class.
Hey Matt-
ReplyDeleteI couldn't agree with you more about the strength in numbers visual. The orthodox economists, the status quo apologists, and the bankers that parasite off the current system engage in every modern mechanism of propaganda and manipulation. I think its high time we met fire with fire. Where are our think tanks and mainstream media acolytes? Where are our wealthy benefactors funding the means of idea distribution? We definitely need to be more organized. We have reality on our side, so its just a matter of spreading the message in public. Has anyone given any serious thought to setting up a 501c3 "social welfare" organization to centralize funds, make strategic marketing buys, and hassle media outlets into interviewing our allies?
Clonal,
ReplyDeletePoint taken, and if one is unemployed, one has no income to overtax to result in a refund in the first place.....
but I would point out that even if you strip out the tax refunds this month the result is still net withdrawals approaching $200B and an ex post deficit of over $100B just thru the 21st... which is back to levels that in the recent past has been adequate to as Warren says "muddle thru"...
No doubt morons have trashed our economy... no argument from me there for sure....
I'm looking at this data mostly to gauge whether we are going into a full fledged catastrophic situation similar to 2008... where though this year, any fiscal response to such a cascade of liquidation imo would not be as forth coming due to the current population density of morons at the controls this year vs. 2008...
rsp,
Auburn,
ReplyDeleteI would surmise that there are only less than 1,000 of us out of now over 7 billion humans WORLDWIDE who understand these things... so I think we are stuck with a "shoestring" budget for now it would seem... and we probably are just going to have to keep leveraging the new media (for now anyway)..
But you make a good point that those types of institutional structures should probably be planned for...
As I understand it, some MMT folks have received some funds from Soros' INET so at least some MMTers are getting some financial support out there...
rsp,
Auburn, this is the imbalance of power weighted toward "capital" over labor that I have been talking about.
ReplyDeleteCentralized power (capital, ownership) > privilege > economics rent > +wealth > +power
That why it usually takes revolution to change that pernicious flow that becomes a self-augmenting vicious circle. The advantage of democratically elected government where representatives stand for election periodically is that this can change w/o revolt. But in many ways that is just an illusion that creates an obstacle to revolt rather than providing a realistic pathway to meaningful change.
For example, liberal Senator Tom Harkin (D-IA) is retiring and Rep. Steve King (R-IA) is considering running for the seat. King is right-wing nut case who only has a credible chance of winning in a state-wide election rather than in a gerrymandered district because of the billionaire money he knows he can count on. He mounting an exploratory investigation of his electoral chances right now, which means he is canvassing the billionaires for pledges.
To compete with that the Democratic opponent, whoever that will be, will have to do the same thing with Democratic funders.
Whatever the outcome, centralized power will win. It's just a question of what special interests will prevail.
So this is a huge uphill fight when dollars are votes, and "they" have the dollars.
Matt, could be looking at the second leg down developing. Apparently the morons cannot see it looming.
ReplyDelete"He mounting an exploratory investigation of his electoral chances right now.... which means he is canvassing the billionaires for pledges..."
ReplyDeleteLOL! Classic....
This is so humiliating Tom... rsp
Hartmann is supposed to have Stephanie Kelton on his show Monday.
ReplyDeleteKen I wish he would have for instance both she and perhaps an MMT non-academic (Mike for instance) on at the same time so that an image of MORE THAN ONE person and agreement on this issue could be created.... this has been MISSING.
ReplyDeletersp,