Public sector messaging

 The public sector unions have Overton windows and are great at projecting internal battles.  Most of these unions lost their tax battles, they are budgeting based on yet discovered taxes. Hard to do and they have intra-union squabbles on who gets funded. Defund police, close schools, hospitals packed, early retirements; all these events have very strong union funding issues behind them.  Whatever was going to happen, happens earlier.

This is another of Powell's pet peeves, I can guess.  He is stuck keeping pension investments healthy, another regulatory job the belongs to governments. Most of his stimulus really is a twist on the same theme, get the banks out of the tax collecting  business. 

We will see more of this:

Bloomberg) -- West Covina, California, which sold $204 million of pension bonds in July, is at the fiscal brink because of its ineffective management and raiding of reserves, according to a report Tuesday by State Auditor Elaine Howle. The southern Californian city of about 105,000 residents helped cover salary and benefit costs for its public safety workers by siphoning from reserves, halving it

Read more at: https://www.bloombergquint.com/onweb/california-city-that-sold-pension-debt-in-july-at-fiscal-brink
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A small jurisdiction of 150,000. Mostly using property taxes and retail sales. Retail taxes are going, going, gone. This is the general shadow banking effect, the Amazon, WalMart effect. Taxes on money favor verticalization, internalizing the excess tax. It shows in velocity. These consumers take one trip per quarter to WalMart and stock up, like forever. The deflation comes because the per price cost of a can of beans goes way down when purchased in cases of gallon cans, economies of scale. 

Absent the Fed taxes and fees, much of this can be externalized back into public markets. Shopping malls run as independent inventory systems are still a very good partition, able to compete with Amazon. But all those separate exchanges come with a regulatory or fee cost, separately. Technology will rescue this problem, sandbox is all about smooth inventory flow. We can supply the entire mall, and their customers, with inventory tokens that work fine on existing POS. 

I digress. The point is we can restore a robust mall system with retail taxes, but not with the central bank taxing us because we are stuck with unions. That is a big loop that has nothing to do with money, and sandbox wants that externalized.