Reseve balances stabilized to pre Trump values

 

The blue line. Those are reserves in the regulated system. The measured economy is about the same as five years ago. 

The growth since then has gone to shadow banking. Shadow banks avoid that seigniorage, the difference between red and blue. And seigniorage taxes are going to triple very soon.

That Fed tax dominates the regulated system, but all levels of government are stuck with regulated banking. The Fed tax crowds out other taxes. This is effectively a tax on paying taxes. The more your local government taxes you, the Fed taxes you another 1.5%.  This is brick wall, this is an impossibility for the large states. The can will not kick, this is sudden stop.