I agree with this as it normally applies so long as I am the one that gets to determine when spending is out of whack. But who is to say that spending is out of whack, as you put it? There is no budget possible that someone won't declare spending "out of whack." If you can reduce this "out of whack" business to objective terms than " spending out of whack" takes on a substantive meaning. Otherwise its an expression with wide appeal, but meaningless nevertheless, wouldn't you say? I have claimed there is currently a breakdown in the U.S. tax system. I firmly believe this "breakdown" would exist even if we were to bring spending under much tighter control. Our broken tax system threatens our democracy, but not because we aren't taxing enough to hold down deficits, which we aren't. Too large deficits, if persistent, can be a side effect of taxes being "out of whack" with spending. And there is very likely a long term threat to the soundness of the Dollar posed by persistently too high deficits. I'm more concerned about an immediate threat of another kind however. The threat I perceive has little to do with government spending, but everything to do with bad tax policy and the threat this poses to our democracy. I maintain that there are good reasons to tax. Thinking of taxes as raising money to spend, however, will confuse the issue, even though we do spend tax revenue. My thinking on this point is radical!, and I expect it to raise some hackles. This has taken the usual form equivalent to "you are full of shit". This full of shit thing comes always from those who believe that government raises taxes in order to get money to spend , and when government spends more then its revenue allows, it must borrow the difference. The MMT economists reject this claim as false. On this point, I am in total agreement with their radical view.
Out of whack simple as = outtake of current fiscal year more than intake of previous five years. Or some other similar measure.
Excellent! that's almost correct! Fed policy is an important influencer of money demand which in turn determines the amount of temporary inside money (the money that appears when banks make loans) in the economy. It's the kind of money that dominates "the money supply". The other place money comes from is Congress. That's the source of outside money in the economy and that money is semi-permanent. It stays until Congress decides to tax it back out of the economy. In the meantime it can be transformed to and from its Treasury security form. Deficit spending is how new outside money gets into the economy and taxes are the way outside money is removed. Then we have transformation of money from one form to another. That's what happens when the Treasury or Fed sell treasuries and when the Fed buys Treasuries. Selling Treasuries converts circulating money to its non-circulating, Treasury form. Think of this as sidetracking circulating money as though it were put on a shelf for a while.