The real U.S. economy has been contracting, despite the input of huge military budgets, and the impact of trillions in “COVID and Green Deal stimulus” which was still present in the consumer economy in 2022. Industrial production, manufacturing output, and capital goods orders all were lower in February than they had been in February 2022. By February, regional manufacturing indices were much deeper into contraction. In the first quarter to March 20, there were 48 large corporate bankruptcy filings (including banks) in the U.S. economy, with “large” meaning liabilities of $50 million or more. This is more than twice the level of the same period in 2022, and half the level of the economic collapse year of 2009.
Regarding the bank crisis:
The Federal Reserve Open Market Committee on March 22 forecast essentially zero economic growth in 2023 (0.4% for the year), and made clear, including in Fed Chair Jerome Powell’s press conference, that now, the bank crisis will “tighten credit” and accelerate the economic contraction. In fact, the Federal Reserve’s weekly forms on “Bank Assets and Liabilities” and “Factors Affecting Federal Reserve Balances” are showing it happening: just “Follow the money.”
