Treasury Flooded Consumers With Money In December, Just In Time To Unleash Holiday Shopping "Animal Spirits"
When you have your back against the wall, and the only thing at your disposal is the Fed's money printer on loan, what do you do? Well, if you are the Treasury, you let money rain. Literally. In December, according to the Financial Management Service, the US Treasury dispensed a stunning 69.5% more in Social Security Outlays and Unemployment Insurance on a year over year basis: the administration knew all too well it could not afford to let this holiday season go to waste. So, after averaging at $43.6 billion in monthly outlays, Social Security withdrawals from the UST surged by a unprecedented 48.6% in December to a whopping $69.5 billion. This is not a volatile or seasonal series.
Combine the previously discussed abnormal spike in unemployment insurance, and you get the following chart:
On a month-over-month percentage change basis, the combined December number is stunning: a 69.5% increase in Treasury spending to boost consumption no matter what the price.
So when everyone is discussing the amazing holiday retail season (which wasn't really that amazing, and was just a little over a 1% improvement compared to last year), will anyone take the time to normalize for monthly "stimuli" in the form of excess SSN and Unemployment payments? We didn't think so. We are confident that were someone to do that, it would disclose yet another insidious way in which the US Government is directly and indirectly subsidizing the economy, in an ever more failed attempt to boost consumer confidence of the ever more defunct American middle class.