Down for the month but so far the weak upward trend remains:
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Housing starts, industrial production, small business index
June 17, 2022 at 14:16 PM EDT
Growth overall remains sluggish as the economy becomes dependent on private sector credit expansion (private sector deficit spending) to offset the too tight post-Covid fiscal policy. Fed rate hikes add interest income to the economy as gov pays more interest on the $30+ trillion of public debt, which, if anything, supports rather than dampens demand […] The post Housing starts, industrial production, small business index appeared first on Mosler Economics / Modern Monetary Theory .
Growth overall remains sluggish as the economy becomes dependent on private sector credit expansion (private sector deficit spending) to offset the too tight post-Covid fiscal policy.Fed rate hikes add interest income to the economy as gov pays more interest on the $30+ trillion of public debt, which, if anything, supports rather than dampens demand or credit expansion, but it does contribute to higher prices which further reduces the real, inflation adjusted value of the public debt, which is a fiscal tightening. This is a repeat of 1979 where the increase in the price level exceeded the growth in deficit spending which is functionally the same as the govt running a budget surplus.
