Stranger Things

The Graph at FRED: https://fred.stlouisfed.org/graph/?g=1Jhhk

This Graph at FRED: https://fred.stlouisfed.org/graph/?g=1Jhiz

1. It is pretty rare that measures of debt go negative. These two graphs show the change in debt for households and for non-financial corporate business. Going negative means that households and NCB owe less than they did a few months ago. That's a good thing on an individual level, but when we reduce debt we reduce the quantity of money in the economy.

2. Money that we borrow and spend is money we put into the economy. If households and non-financial corporate businesses are putting less money into the economy I start to worry, because Milton Friedman said

There is strong evidence that a monetary crisis involving a substantial decline in the quantity of money is a necessary and sufficient condition for a major depression.

3. Not all of the "Debt Securities and Loans; Liability, Level" datasets at FRED went negative at the end of last year. I only find a few. But I have to wonder if this is the best time to cut the federal spending. I have indeed said that Trump's policies are creating a depression, but I say it as a warning, not a wish.